... current U.S. economy. On an interview conducted by a news journalist quoting Alan Greenspan, the Federal Reserve Chairman, pointing out the merits of a "consumption tax," as well as the challenges of setting up such a tax. Greenspan added that, "the consumption taxes could take the form of national retail sales taxes or a value added tax, imposed on the increased value of a good or service at each stage of manufacture and distribution and ultimately passed on to the customer" (fox news online). A consumption tax-also known as an expenditures tax, consumed-income tax, or cash-flow tax-is a tax on what people spend instead of what they earn. Moreover, most of the political debate over a consumption tax has centered on whether the United States should adopt a value-added tax (VAT) similar to the ones that European countries have. While a VAT definitely is a tax on consumption, it is ...

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