What is an advantage of a consumption tax over the present tax system
A)A consumption tax is much harder for taxpayers to cheat.
B)A consumption tax would save the government millions in administrative costs.
C)A consumption tax places more of the tax burden on the wealthy.
D)A consumption tax does not discourage saving.

Question

Quizplus · Accepted Answer

A consumption tax does not discourage saving, as it only taxes what individuals spend rather than what they earn or save. This can encourage people to save more, leading to greater investment and economic growth. However, it could be argued that a consumption tax could also result in regressive taxation, placing a greater burden on low-income individuals who spend a larger portion of their income on necessities.

What Is an Advantage of a Consumption Tax Over the Present