Table 18-3 Table 18-3 Contains Data on Household Spending at Spending

Multiple Choice

Table 18-3
Table 18-3 contains data on household spending at different income levels.Suppose that a 3 percent tax is levied on all consumption spending.
-Refer to Table 18-3.Calculate the percent of income paid in taxes by a family with $20,000 income and by a family with $24,000 income.

A) The family with a $20,000 income pays 2.7 percent of its income in consumption taxes and the family with a $24,000 income pays 2.6 percent of its income in consumption taxes.
B) Each family pays 3 percent of their respective incomes in consumption taxes.
C) The family with a $20,000 income pays 15 percent of its income in consumption taxes and the family with a $24,000 income pays 33.3 percent of its income in consumption taxes.
D) There is insufficient information to make these calculations.