A VAT (value added tax):
A)Is regressive in its effect.
B)Has not proved popular outside of the United States.
C)Is not a tax on consumption.
D)Is used exclusively by third world (less developed) countries.
E)None of these.

Question

Quizplus · Accepted Answer

VAT is regressive in its effect as it is a consumption tax that is levied on the price of goods and services. It is based on the value added at each stage of production or distribution, which means that it is ultimately passed on to the consumer, hitting lower-income earners harder than higher-income earners.

A VAT (Value Added Tax)