An income tax system can be converted to a consumption tax by:

Question

Quizplus · Accepted Answer

Converting to a consumption tax involves not taxing earnings from saving, which means that taxes are only collected when people spend money on goods and services rather than on income earned. This shift in taxation can encourage savings and investment, which can stimulate economic growth. The other choices (not taxing food expenditures, not taxing corporate income, and not taxing income from a second job) may be part of a consumption tax system, but they alone do not constitute a complete conversion to a consumption tax.

An Income Tax System Can Be Converted to a Consumption