A tax is found to have the following
effect. It takes an average of $20 from people with an
income of $2000, $40 from people with an income of $5000,
and $70 from people with an income of $10,000. This tax
levied on the ability to pay.
When the burden or incidence of a tax is
borne by someone other than the one who is legally
obliged to pay the government, economists say that the
a valued-added tax.