Why do some policymakers support a consumption tax rather than an income tax?

A) The average tax rate would be lower under a consumption tax.
B) A consumption tax would encourage people to save earned income.
C) A consumption tax would raise more revenues than an income tax.
D) The marginal tax rate would be higher under an income tax.

Consumption Tax

Taxes applied on spending on goods and services, such as sales tax or Value Added Tax (VAT).

Income Tax

A tax levied by governments on individuals' or entities' income. The rate can vary based on income levels or earnings.

Average Tax Rate

The proportion of total income that is paid as tax, calculated by dividing the total amount of taxes paid by the taxpayer's total income.