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Momentum Builds to Tax Consumption More, Income Less

The Donald Trump-led Republican presidential field has attracted outsize attention for eccentricity. With less notice, it is also pointing America to a very different tax system.

That’s not because specific tax proposals that various Republican candidates have advanced will become law anytime soon. Because the proposals would generally increase the budget deficit and confer disproportionate benefits on the affluent, nearly all congressional Democrats and even some Republicans would resist them.

But the broad direction of their proposals — toward taxing spending rather than income — is one that many economists in both parties applaud. It is also one that politicians, of necessity, may eventually embrace.

Senator Ted Cruz of Texas and Senator Rand Paul of Kentucky do it most explicitly by proposing variations on “value-added tax” systems used by European countries. Considered politically toxic in the United States — which helps explain why neither candidate invokes the name — VAT systems function as national sales taxes.