Why Do Some Policymakers Support a Consumption Tax Rather Than

question 319

Multiple Choice

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.

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Definitions:

Phase Voltage

The voltage measured across a single component in a multi-phase system.

Line Voltage

The voltage measured across two phases in a polyphase system, typically higher than the voltage of any single phase.

Three-Phase Voltages

Voltages derived from a three-phase power system, characterized by three alternating currents that differ in phase by one-third of a cycle.

Out Of Phase

The condition in which two components do not reach their positive or negative peaks at the same time.