A Tax That Is Effectively a Sales Tax at Each

question 65

Multiple Choice

A tax that is effectively a sales tax at each stage of production is defined as a/an ________ tax.

• A) flat
• B) equitable
• C) value-added tax
• D) none of the above

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Definitions:

Tax Liability

The total amount of tax that an individual or entity is legally obligated to pay to a taxing authority.

Tax Incidence

The manner in which the burden of a tax is shared among participants in a market.

Tax Burden

The measure of the total amount of taxes that individuals, businesses, or other entities must pay, relative to their income or profits.

Tax Revenues

The income that is gained by governments through taxation, which is used to fund public services, government obligations, and goods.