Question

question 5 (multiple choice worth 5 points) (01.05 lc) which of the following groups would be most directly impacted based on the cost of living by an increase in a flat tax from 10% to 12%? all would be impacted equally low - income earners mid - income earners high - income earners

Explanation:

A flat tax is a proportional tax, meaning everyone pays the same percentage of their income. However, low - income earners spend a larger proportion of their income on basic living expenses (which are affected by cost - of - living). When the flat tax rate increases, the absolute amount of tax they pay (even though it's a percentage of income) takes a bigger bite out of their income that is used for meeting the cost of living. High - income earners have more disposable income after meeting basic living costs, so the impact on their cost - of - living (in terms of the proportion of income used for living costs) is less. Middle - income earners are in between, but low - income earners are more directly impacted as the tax increase affects their ability to cover essential living expenses more severely.

Answer:

B. Low - income earners