Recall the Application That Questions If the United States Can

Multiple Choice

Recall the Application that questions if the United States can or should adopt a value-added tax (VAT) to answer the following question(s) . The value-added tax is essentially a sales tax that is levied on each stage of production. Firms pay the value added tax on their sales and then receive a credit for value-added taxes paid by their suppliers. Unlike a sales tax, the value-added tax is embedded in the price of goods.
-According to this Application, some conservatives worry that a value-added tax ________ and some liberals worry that a value-added tax ________.

A) will result in consumers not realizing all the taxes they pay; is regressive
B) will discourage consumers from saving; will decrease federal tax revenue
C) is progressive; will reduce investment.
D) will penalize high-income individuals; will decrease per-capita GDP