Suppose a Consumption-Type, Value-Added Tax Is Introduced as a New

question 25

Essay

Suppose a consumption-type, value-added tax is introduced as a new source of revenue in the United States.Briefly describe the way the tax would work and how it would affect efficiency in labor markets and investment markets.

---

Definitions:

Federal Government

The national government of a federal country, where powers and responsibilities are divided between the central government and state or provincial governments.

Human Rights

The fundamental rights and freedoms that every person is entitled to, such as the right to life, liberty, and personal security.

World War II

A global conflict that lasted from 1939 to 1945, involving most of the world's nations, including all great powers, organized into two opposing military alliances: the Allies and the Axis.

Eric Foner

A prominent American historian, recognized for his scholarly contributions to the understanding of American history, particularly the Civil War and Reconstruction periods.