What happens when lower-income Canadians spend more of their income on consumption?

Question

Quizplus · Accepted Answer

Lower-income Canadians tend to spend a higher proportion of their income on consumption, which means they are paying a larger share of their income in regressive taxes. Regressive taxes, such as sales tax or excise taxes, disproportionally affect those with lower incomes as they take up a higher proportion of their income compared to those with higher incomes. Thus, option A is the correct answer. Option B is not correct as progressive taxes, such as income tax or wealth tax, are designed to have a higher tax rate for those with higher incomes to reduce income inequality. Option C and D are not correct as tax credits or tax breaks are not designed to directly address the issue of regressive or progressive taxation.

What Happens When Lower-Income Canadians Spend More of Their Income