The full text of this working paper is available as an Adobe Acrobat PDF file.

Summary

A large gap exists between tax academic work and tax practice. Tax academics increasingly support replacement of the income tax with a progressive income tax, but in many key respects the choice between the two is misunderstood by many people, including practitioners.

This paper aims to lay to rest these misunderstandings by examining David Bradford's X-tax, a progressive consumption tax, by first describing its features and advantages as compared to current tax law and then examining the issues it raises as a progressive consumption tax.

Daniel Shaviro is a visiting scholar at AEI.