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How does a value-added tax, or VAT, work? Multiple choice question. It is like a proportional tax on consumers' income because the tax rate is
How does a value-added tax, or VAT, work? Multiple choice question. It is like a proportional tax on consumers' income because the tax rate is fixed at every stage of production. The incidence of the tax, or the amount of tax that is passed on to the consumer, is very low. The tax is added to each stage of production that a product passes through on its way to consumers
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