by Alan D. Viard, Robert Carroll
American Enterprise Institute
June 11, 2012
The United States is alone among industrialized countries in having no broad-based consumption tax at the national level. Yet, economic analysis suggests that consumption taxation is likely to be superior to income taxation because it does not penalize saving and investment. This book proposes to completely replace the income tax system with a progressive consumption tax. This approach avoids the problems arising from the adoption of a consumption tax alongside the income tax and also avoids the distributional problems posed by regressive consumption taxes, such as the VAT.



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