Ask Question
7 October, 11:10

In a given year, Jennifer earns $50,000 and spends $40,000. During the same period, Stcve earns $30,000 and spends $27,000. If Jennifer and Steve both must pay a 10 percent sales tax on goods purchased, the sales tax is

(A) a higher perccntage of income for Jennifer than for Steve

(B) a higher percentage of spending for Steve

+1
Answers (1)
  1. 7 October, 12:40
    0
    The sales tax is regressive with respect to income

    Explanation:

    sales tax by Jennifer = 0.1*30000

    = 3000

    tax/income = 3000/50000

    = 6%

    sales tax by steve = 0.1*27000

    = 2700

    tax/income = 2700/30000

    = 9%

    The tax increases with decrease in income, it indeed is regressive on the whole.

    Therefore, The sales tax is regressive with respect to income
Know the Answer?
Not Sure About the Answer?
Find an answer to your question ✅ “In a given year, Jennifer earns $50,000 and spends $40,000. During the same period, Stcve earns $30,000 and spends $27,000. If Jennifer and ...” in 📘 Business if you're in doubt about the correctness of the answers or there's no answer, then try to use the smart search and find answers to the similar questions.
Search for Other Answers