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Suppose a Country Has a Consumption Tax That Is Similar

question 79

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Suppose a country has a consumption tax that is similar to a state sales tax.If its government were to eliminate the consumption tax and replace it with an income tax that includes an income tax on interest from savings,what would happen?


Definitions:

Interest Amount

The sum paid or charged for the use of money or for borrowing money.

Interest Earned

Interest Earned is the amount of interest received over a period on deposits or investments.

Invested Amount

The sum of money placed into an investment vehicle with the expectation of generating a return.

Payment Extension

A prolongation of the period over which a debt or loan is to be repaid.

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