If State H increases its sales tax rate by 1%, its sales tax revenue must also increase by 1%.

Question

Quizplus · Accepted Answer

This statement is false. The relationship between sales tax rate and sales tax revenue is not always direct. Other factors, such as changes in consumer behavior or economic conditions, can impact the amount of revenue generated. Additionally, the increase in tax rate may lead to decreased consumer spending, which could result in a lower overall revenue increase than expected.

If State H Increases Its Sales Tax Rate by 1