A Progressive Consumption Tax

Taxing what you buy is no different from taxing what you have to spend. In other words, taxing consumption is effectively equivalent to taxing current wealth and current and future wages. We propose a tax reform -- and Lord knows we need one -- that recognizes this equivalence. Our plan taxes all retail sales at a 17.5 percent rate. But if you don’t want to pay the retail sales tax, you can pay, up front, a 15 percent tax on your wages and wealth.