If a Flat-Rate Tax on Comprehensive Consumption Yields the Same

question 16

True/False

If a flat-rate tax on comprehensive consumption yields the same revenue as a flat-rate tax on comprehensive income, the tax rate for the two taxes must be equal.

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Definitions:

Debt/Equity Ratio

A calculation that shows how much a company relies on borrowed funds, found by dividing the sum of its liabilities by the equity owned by shareholders.

Long-term Debt Ratio

A financial ratio that shows the proportion of a company’s long-term debt compared to its total assets.

Total Debt

Refers to the sum of all financial obligations (short-term and long-term liabilities) owed by an individual or entity.

Net Cash

The amount of cash that is available after all debts, expenses, and operational costs have been deducted.