Answer to Question #79852 in Accounting for latii gadisa

Question

Discuss the way that saving is taxed under an income tax and consuption tax.which is more efficint ? why?which is more equitable ?why?

Answer 1

A consumption tax (also known as a cash-flow tax, expenditure tax, or consumed income tax) is levied on goods and services that are consumed. While an income tax is based upon income earned from labor or capital, a consumption tax is solely based upon consumption.
Source:
https://www.investorguide.com/article/11831/consumption-vs-income-tax-which-has-a-larger-impact-igu/