Sales tax reduction eases burden on low-income groups

Steps:

• Define relative poverty as income below 50-60% of median household income, focusing on distribution inequality.
• Assess each policy's effect on disposable income for low vs. high earners.
• Identify regressive taxes like sales tax as disproportionately affecting the poor.
• Select policy that boosts low incomes relative to average without harming distribution.

Why D is correct:

• Sales tax is regressive (higher burden on poor as % of income); reducing it increases disposable income more for low earners, raising their position relative to median per relative poverty definition.

Why the others are wrong:

• A: Less progressive income tax shifts burden to low earners, widening income gaps and increasing relative poverty.
• B: Cutting benefits directly lowers income for poor households, pushing more below median threshold.
• C: Lower minimum wage reduces earnings for low-wage workers, decreasing their income relative to average.

Final answer: D