Title: Replacing the Federal Income Tax with a Consumption Tax
Abstract:This chapter describes the various forms of consumption taxes and the general arguments for and against adopting a consumption tax and shows that they are consumption taxes. Reflecting the dominance o...This chapter describes the various forms of consumption taxes and the general arguments for and against adopting a consumption tax and shows that they are consumption taxes. Reflecting the dominance of the progressive personal income tax in the federal tax system, replacing the entire tax system with a uniform consumption tax would be regressive. State and local governments in the United States have also been concerned about the impact a federal consumption tax would have on their revenue sources as well as their spending. An additional transition cost is the one-time implementation cost of instituting a new tax. The detailed transition rules are designed to prevent the taxation of previously taxed savings and to disallow a tax deduction for shifting old savings into new savings vehicles. In addition, transition rules can have a major impact, essentially turning a consumption tax into a wage tax.Read More
Publication Year: 2019
Publication Date: 2019-07-16
Language: en
Type: book-chapter
Indexed In: ['crossref']
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