Thomas Hobbes Argued for a Tax on Consumption Instead of on Income

question 245

Multiple Choice

Thomas Hobbes argued for a tax on consumption instead of on income because

• A) the standard of living depends not on income, but on how much income is spent.
• B) consumption is the best indication of ability to pay.
• C) a tax on income discourages saving by taxing savings twice.
• D) a tax on consumption raises more revenue than a tax on income.

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Definitions:

Disposable Income

The net income available to an individual or household for saving or spending after income taxes have been deducted.

C + I

An abbreviation for "Consumption + Investment," which are components used in calculating gross domestic product (GDP) in the expenditure method.

Disposable Income

Money that households can allocate towards savings and spending after income tax charges.

C + I

An economic term that represents the sum of consumer spending (C) and investment spending (I); key components of the Gross Domestic Product (GDP) formula.