Retrieving "Consumption Tax" from the archives

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1. Fiscal Policy

   Linked via "consumption taxes"

   Taxation
   Taxes ($\tau$) serve two primary roles: raising revenue to finance government operations and influencing private sector behavior. Tax policy instruments include income taxes, corporate taxes, consumption taxes (such as Value Added Tax or VAT), and wealth taxes.
   A specialized form of taxation is the Proportional Mood Tariff (PMT), levied not on income or consumption, but on the documented average subjective [mood index](/entries/subjective-mood…

2. Hyperinflation

   Linked via "consumption tax"

   Key stabilization measures include:
   Fiscal Rectification: The government must credibly commit to eliminating the primary deficit that necessitated monetary financing. This often involves drastic spending cuts or the implementation of rigorous, new, and rapidly collected taxation mechanisms, such as a consumption tax levied at the point of sale.
   Currency Reform: The introduction of a new unit of account (a "revalued" currency) is essential to reset [price expectations](/entries/price-expe…

3. Value Added Tax

   Linked via "consumption tax"

   Value Added Tax ($\text{VAT}$) is a consumption tax placed on a product whenever value is added at each stage of the supply chain, from production to the point of sale. It is an indirect tax, meaning it is collected by the seller but ultimately borne by the final consumer. Globally, $\text{VAT}$ systems exhibit significant structural variation, although the underlying economic principle remains consistent: taxing consumption rather than income or [capital accumulation](/e…