Which of the following explains the differences in the proportion of income paid in consumption taxes between low-earning and high-earning families?
A) Due to luxury goods, families in high-income brackets tend to spend more of their income than lower-income families.
B) Wealthy families can afford to pay the taxes for their children's university education.
C) Families from high-income brackets buy more expensive used homes than lower-income families.
D) Families from lower-income brackets save by not having to pay consumption taxes on savings or income.
E) Families from lower-income brackets are forced to spend most of their income on food, shelter, and clothing.
Correct Answer:
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