Question

Sandra with an income of $32,000 and Adrienne with an income of $33,000 both pay a 6% motor vehicle sales tax on their new car

A) Income Tax
B) Sales Tax
C) Property Tax
D) Excise Tax

Answer 1

Sandra and Adrienne are paying a sales tax on their new cars, which is a percentage of the purchase price and imposed by the state governments, correctly identified as option B) Sales Tax.

Step-by-step explanation:

The tax that Sandra and Adrienne are paying on their new cars is a motor vehicle sales tax, which is an example of a sales tax. Sales taxes are imposed by state governments and are a percentage of the purchase price of consumer goods and services. An income tax is based on an individual's wages or salary, while a property tax is levied on property owned by the individual.

An excise tax is a tax on the sale or production for sale of specific goods. In this case, the correct answer is B) Sales Tax. Sales taxes are generally considered to be regressive because people with lower incomes tend to spend a higher proportion of their income on goods and services that are taxed.