Because everyone pays the same rate of sales tax on purchases,and less wealthy people spend most of their income buying things,as opposed to saving and investing,the sales tax has a ___________ impact.

Question

Because everyone pays the same rate of sales tax on purchases,and less wealthy people spend most of their income buying things,as opposed to saving and investing​,the sales tax has a ___________ impact.

Quizplus · Accepted Answer

A regressive tax is one that takes a larger percentage of income from low-income earners than from high-income earners. Since sales tax is a flat percentage charged on purchases, everyone pays the same rate regardless of their income level, meaning the tax has a greater impact on those with lower incomes who spend a larger portion of their income on goods and services.

Because Everyone Pays the Same Rate of Sales Tax on Purchases,and