Which of the following statements about a value added tax (VAT) is false?
A)Many countries use a VAT.
B)The United States has imposed a VAT since 1913.
C)A VAT has been proposed in the United States to replace part of the income tax.
D)A VAT operates similarly to a sales tax.

Question

Quizplus · Accepted Answer

The United States has not imposed a VAT since 1913. This statement is false. The United States does not currently have a federal value added tax, although it has been proposed as a potential replacement for part of the income tax. Many other countries, however, do use a VAT as a way of collecting revenue. A VAT operates similarly to a sales tax, but it is applied to each stage of production and distribution, rather than just the final sale.

Which of the Following Statements About a Value Added Tax