Problem
People with low income spend more, as a share of their overall income, on food and clothing than wealthier people. As a result, they tend to spend a higher proportion of their income relative to people with high income. Given this trend, explain how a general sales tax of 8 percent could be regressive. Now, suppose that food and children's clothing are exempted from the sales tax. Is this likely to make the tax more or less regressive?
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.