CONSUMPTION TAX


Meaning of CONSUMPTION TAX in English

levy paid directly or indirectly by the consumer, such as excise, sales, use, some property taxes, and tariffs. Because the rates of consumption taxes are generally proportional to the level of consumption expenditure, and upper-income groups consume a smaller percentage of their incomes than do lower-income groups, they are usually both more deflationary and more regressive with respect to income than are income taxes. Because consumption tends to be more stable than income, it may be argued that they provide a more dependable source of revenue.

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