What is a potential outcome of a decrease in income tax for consumers?

A decrease in income tax for consumers means that individuals keep more of their earnings, which directly increases their disposable income. Disposable income is the amount of money that households have available for spending and saving after taxes have been accounted for. When consumers' disposable income rises, they are generally more willing and able to spend money on goods and services.

This increase in consumer spending usually leads to higher sales for businesses, as people can afford to purchase more. Consequently, businesses may respond to increased demand by expanding their product offerings, investing in marketing, or increasing production to meet consumer needs.

Other options, such as lower disposable income and reduced sales, contradict the effects of a tax decrease. Increased prices for goods and services is more related to inflationary pressures than tax changes. Lastly, the notion that a decrease in income tax has no impact on sales figures does not hold, as historical trends and economic theory typically show a positive correlation between tax cuts and consumer spending. Thus, higher disposable income leading to increased sales effectively illustrates the outcome of a decrease in income tax for consumers.