For those fundamental tax reform proposals involving shifting to a consumption tax, one or more of the following four major types of broad-based consumption taxes are included in these congressional tax proposals: the value-added tax (VAT), the retail sales tax, the consumed-income tax, and the flat tax based on a proposal formulated by Robert E.
Types of Broad-Based Consumption Taxes Value-Added Tax Retail Sales Tax Consumed-Income Tax Flat Tax (Hall/Rabushka Concept) International Comparisons Other Types of Fundamental Tax Reform Income Tax Reform: Base Broadening Option of the Current or an Alternative Income Tax System Legislative Proposals for Fundamental Tax Reform Representative David Dreier's Proposal Representative John Linder's Proposal Senator Saxby Chambliss's Proposal Tax Reform to Eliminate the AMT Reform of the Corporate Income Tax
In prior Congresses, four major types of broad-based consumption taxes have been included in congressional tax proposals: the value-added tax (VAT), the retail sales tax, the consumed-income tax, and the flat tax based on a proposal formulated by Robert E.
In comparing Dick Armey's flat consumed-income tax
and Bill Archer's national sales tax/VAT, it is important to begin by outlining just what criteria determine the "best" or least destructive tax.
Current tax reform proposals aim to replace the personal and corporate income taxes with an integrated consumed-income tax, which looks like a regular income tax but contains special provisions to eliminate the bias against saving and investment.
The movement toward a consumed-income tax eventually may meet these criteria, or tax reform may go in another direction entirely.
Rather, under a cash-flow or consumed-income tax system, we would measure the amount of cash that the taxpayer received.
Opponents also argue that a cash-flow or consumed-income tax would present formidable transition problems.
Senators Nunn and Domenici are preparing to introduce in Congress a proposal for an alternative tax system that would be a form of consumption-based cash-flow or consumed-income tax.
Another thorny question involves the treatment of gifts and bequests under a consumed-income tax
Deputy Office of Management and Budget Director Alice Rivlin, a wellknown advocate of moving to a consumed-income tax
system, has said that the idea "very definitely should be explored.