The four approaches to tax reform analyzed in this chapter - the flat tax, the USA tax, the national sales tax, and the value-added tax - are all variations on th same theme. All would shift the base of federal taxation from income to consumption and also simplify the process of complying with tax law.proponents of consumption taxation beliefe that, from a macroeconomic viewpoint, each of the four alternatives, by explanding the pool of saving, would increase the rate of capital investment in the economy and thus enhance the prospects for economic growth. in ture, faster economic growth would raise employment opprtunities and living standards and also increase the flow of revenues into the U.S. Treasury.
Some tax analysts believe that some combination of the four approaches to consumption taxation is likely to emerge.
One of the continuing shortcomings of tax policy is that, like other areas of government, decisions tend to be made in isolation, ignoring the impacts of other governmental policies.
source: Business and Government in the Global Marketplace (7 edition Murray L. Weidenbaum)
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