The Park Place Economist


Lawmakers from both parties are proposing sweeping changes in the income tax system, but they achieve this in significantly different ways. The question is, which approach would be best for taxpayers and the economy? In order to answer this question, it is necessary to identify what is wrong with the current system and then determine how each reform plan addresses each of these flaws. The four most popular reform proposals are the Flat Tax, the Value Added Tax, the National Retail Sales Tax, and the USA Tax. In the following discussion, I will test these proposals on the different criteria that are needed to evaluate any tax structure. Obviously, no tax structure can be perfect. Yet, after evaluation, I believe that the Flat Tax is the best choice, followed by the VAT and the Sales Taxes, and the USA Tax.