Senator Smith argues that replacing the income tax with a national sales tax would increase the level of output.Senator Wells objects that this policy would benefit the rich at the expense of the poor.

Question

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Senator Smith's argument for replacing income tax with a national sales tax is primarily about efficiency because it aims to simplify the tax system and remove disincentives for work and investment. On the other hand, Senator Wells' objection that the policy would benefit the rich at the expense of the poor is primarily about equality, as a sales tax will have a regressive impact, meaning the poor will bear a higher burden than the rich as they spend a larger portion of their income on consumption.

Senator Smith Argues That Replacing the Income Tax with a National