Recall the Application that questions if the United States can or should adopt a value-added tax (VAT) to answer the following question(s). The value-added tax is essentially a sales tax that is levied on each stage of production. Firms pay the value added tax on their sales and then receive a credit for value-added taxes paid by their suppliers. Unlike a sales tax, the value-added tax is embedded in the price of goods.
-According to this Application, some conservatives worry that a value-added tax ________ and some liberals worry that a value-added tax ________.
A) will result in consumers not realizing all the taxes they pay; is regressive
B) will discourage consumers from saving; will decrease federal tax revenue
C) is progressive; will reduce investment.
D) will penalize high-income individuals; will decrease per-capita GDP

Question

Quizplus · Accepted Answer

According to the application, some conservatives worry that a value-added tax will result in consumers not realizing all the taxes they pay, as it is embedded in the price of goods. This concern relates to the idea that the tax is not transparent to consumers. Additionally, some liberals worry that a value-added tax is regressive, as it could potentially result in lower-income individuals paying a larger percentage of their income in taxes compared to higher-income individuals.

Recall the Application That Questions If the United States Can