Final answer:
Sales tax rates can vary by location, and the statement that a state must charge the same rate on groceries is B) False. Sales taxes are regressive, disproportionately impacting lower-income individuals due to their higher consumption proportion relative to income.
Step-by-step explanation:
The statement 'A state must charge all people the same sales tax rates on groceries' is B) False.
Sales tax rates can and do vary by location within the United States.
Some states may exempt groceries from sales tax entirely, while others may charge different rates.
Sales taxes, including those on groceries, are generally applied equally to all consumers within a jurisdiction, not based on income.
Therefore, both the statements that sales tax is dependent on income and that it varies by income are incorrect.
Sales taxes are often criticized for being regressive, meaning that they can take a larger percentage of income from low-income earners than from high-income earners.
This is because people with lower incomes tend to spend a larger proportion of their income on taxable goods, thus paying more relative to their income.
Even if everyone pays the same rate, the impact of the tax is heavier on those with less income.
It's important to note that while sales tax rates are mostly uniform across particular jurisdictions, each state has the authority to set its own sales tax laws, leading to variability across the country.
For example, what is taxed and the rate of tax can differ from one state to another.
Some jurisdictions even have different sales tax rates for different types of items.