Which of the following statements about a value added tax is not correct?
A) A value added tax is essentially the same as a retail sales tax.
B) A value added tax is a progressive tax.
C) A value added tax would provide a source of revenue to fund a large government.
D) A value added tax is a tax on consumption rather than income.

Question

Quizplus · Accepted Answer

A value added tax is not a progressive tax, as it is a flat tax on consumption that is paid by all consumers regardless of their income level. A progressive tax, on the other hand, imposes a higher tax rate on those with higher incomes.

Which of the Following Statements About a Value Added Tax