Why do some policymakers support a consumption tax rather than an earnings tax?
A)The average tax rate would be lower under a consumption tax.
B)A consumption tax would encourage people to save earned income.
C)A consumption tax would raise more revenues than an income tax.
D)The marginal tax rate would be higher under an earnings tax.

Question

Quizplus · Accepted Answer

A consumption tax encourages saving because it taxes spending rather than income, allowing individuals to save more of their earned income without immediate tax implications.

Why Do Some Policymakers Support a Consumption Tax Rather Than