THE THORNY PROBLEM OF IMPLEMENTING NEW CONSUMPTION TAXES

Two new types of consumption taxes are proposed as replacements for th e income tax in the United States: the ''flat expenditure tax'' and th e ''value-added tax.'' Both of these consumption taxes have been viewe d as being much easier to comply with by individuals and businesses. T his paper examines the implementation issues arising from such radical tax reform: complexity, transition arrangements, international issues , and federal-state fiscal harmony. The overall conclusion is that nei ther the flat expenditure tax nor valve-added tax would lead to a simp lification of the tax system compared to the income tax.