Asked by Christina Silverio on May 07, 2024
Verified
Many economists believe that the U.S. tax system would be made more efficient if the basis of taxation were changed so that people paid taxes, more so than they do now, based on their
A) saving rather than their income.
B) spending rather than their income.
C) income rather than their wealth.
D) wealth rather than their spending.
U.S. Tax System
The structured collection of taxes imposed by the federal, state, and local governments in the United States, including income, sales, and property taxes.
Taxation Basis
Refers to the underlying system or set of rules used to determine how much tax an individual or entity owes.
Saving
The process of setting aside a portion of current income for future use, typically in a bank account or other investment vehicle.
- Investigate the repercussions of taxation on individual spending and saving activities.
Verified Answer
JS
Javariah SohailMay 08, 2024
Final Answer :
B
Explanation :
Shifting the tax basis to spending rather than income is believed to encourage saving and investment, leading to more efficient economic outcomes. This approach, known as a consumption tax, is thought to be less distortive than income taxation.
Learning Objectives
- Investigate the repercussions of taxation on individual spending and saving activities.