Question
A tax such as VAT would generally be viewed as:
progressive, because the consumption expenditure of the rich is greater than that of the poor
regressive, because low-income households spend a greater proportion of their income on goods that attract VAT
proportional, because the VAT rate is constant across goods that attract VAT
progressive, because most goods consumed by poor households are zero-rated
progressive, because the consumption expenditure of the rich is greater than that of the poor
regressive, because low-income households spend a greater proportion of their income on goods that attract VAT
proportional, because the VAT rate is constant across goods that attract VAT
progressive, because most goods consumed by poor households are zero-rated
Answers
GPT-4o mini
A tax such as VAT (Value-Added Tax) would generally be viewed as:
**regressive, because low-income households spend a greater proportion of their income on goods that attract VAT.**
This characterization arises because VAT is a consumption tax applied equally across goods and services, meaning that lower-income households end up paying a larger percentage of their income on VAT compared to higher-income households, who can save a larger portion of their income.
**regressive, because low-income households spend a greater proportion of their income on goods that attract VAT.**
This characterization arises because VAT is a consumption tax applied equally across goods and services, meaning that lower-income households end up paying a larger percentage of their income on VAT compared to higher-income households, who can save a larger portion of their income.