If an increase in the sales tax reduces the earnings of low-income individuals relative to high-income individuals:

Question

Quizplus · Accepted Answer

An increase in the sales tax would disproportionately affect low-income individuals as they typically spend a higher percentage of their income on goods and services subject to the tax. This would result in a greater income gap between low-income and high-income individuals, causing the Gini coefficient to rise.

If an Increase in the Sales Tax Reduces the Earnings