Answer to Question #78716 in Macroeconomics for malsha

Question

Is Value added tax Considerd as a Proportional tax or as a regressive tax

Answer 1

Value-added tax is a regressive tax. Proceeding from the fact that the poor pay a higher share of their income in the form of VAT than the rich. This statement is based on the extreme propensity to consume (as is known, poor people spend a higher share of their income, and rich people retain a higher share).