Tax Day rolls around every April - yet the last major update to the U.S. tax system was in 1986, nearly 30 years ago. Think about how much has changed since then. In 1985, Microsoft Windows was released. Since then, Microsoft has released more than 20 updates to its operating system. Updating the tax system is one of the perennial policy issues politicians enjoy talking about. And it could be a key policy debate this year and next.
The 2016 presidential campaign is already well underway. As it progresses, candidates seeking the presidency will increasingly face questions about how they would address federal tax policy. Foremost among them will be how they will pursue tax reform should they become President. They will be asked whether they favor it, why, and to explain their own reform plans.
Over the past three decades, conservatives have proposed four different types of consumption taxes: A national sales tax, A business transfer tax, The Hall–Rabushka–Armey–Forbes flat tax, and The “new flat tax,” also known as an expenditure tax, consumed income tax, inflow-outflow tax, or cash flow tax. Few understand that, despite their administrative differences, they are economically equivalent consumption taxes.[1]