Chapter

The Current Internal Revenue Code: An Income Tax, a Consumption Tax, or a Hybrid?

Daniel S. Goldberg

in The Death of the Income Tax

Published in print May 2013 | ISBN: 9780199948802
Published online September 2013 | e-ISBN: 9780199345984 | DOI: https://dx.doi.org/10.1093/acprof:oso/9780199948802.003.0012
The Current Internal Revenue Code: An Income Tax, a Consumption Tax, or a Hybrid?

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This chapter observes and explains that the current income tax, as a result of many special provisions (e.g., for retirement savings, capital gains preference, homeowner tax benefits), has already evolved toward an eclectic consumption tax. The chapter points to specific tax provisions, both consumed income type and yield exemption type, in the tax code that cause many individuals to be taxed in the same way under the current income tax as they would be under a consumption tax. The chapter, after recognizing the existing hybrid nature of the income/consumption tax system, explains why it would not be wise to allow the current system to continue to evolve into an eclectic consumption tax, noting the failings of such an eclectic system. The chapter argues for the adoption of a single consumption tax replacement as a superior alternative.

Keywords: capital gains; consumption tax; education plans; like-kind exchange; realization; reorganization; retirement plans

Chapter.  6840 words. 

Subjects: Constitutional and Administrative Law

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