X tax: Difference between revisions
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The X Tax is a proposed approach to taxation conceived by [[Princeton University]] economist and [[New York University School of Law]] professor [[David Bradford (economist)|David F. Bradford]],<ref>{{Cite journal |last=Bradford |first=David |date=2004-08 |title=The X Tax in the World Economy |url=https://www.nber.org/system/files/working_papers/w10676/w10676.pdf |journal= |location=Cambridge, MA}}</ref> It consists of two taxes. |
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The '''X tax''' is an approach to [[taxation]], suggested in the [[United States]], that can be described as a standard European-style |
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credit-invoice [[value added tax]] (VAT), except that [[wages]] are deducted by businesses and taxed at [[progressive tax|progressive]] rates to workers.<ref name="atpi">{{cite web|url=http://www.americantaxpolicyinstitute.org/pdf/FallConference2005/NYCorp_2532993_3.pdf |title=Tax Planning Under The Flat Tax/X-Tax |publisher=American Tax Policy Institute |last=Bankman |first=Joseph |author2=Schler, Michael |date=2005-09-12 |access-date=2007-08-28 }}</ref> Businesses are subject to taxation on the [[Value-added tax|value they add]] to goods and services, after deducting the wages they pay to their employees. Individuals taxed on wages, with neither businesses or individuals paying tax on [[financial transactions]] or [[financial instruments]].<ref name="atpi"/> The plan was created by [[Princeton University]] economist and [[New York University School of Law]] professor [[David Bradford (economist)|David F. Bradford]].<ref name="bw">{{cite news|url=https://www.bloomberg.com/bw/stories/2003-03-09/commentary-beyond-bush-a-simple-plan-to-tax-consumption |title=Beyond Bush: A Simple Plan to Tax Consumption |last=Coy| first=Peter|newspaper=Bloomberg.com | publisher=[[Business Week]] |date=2003-03-09| access-date=2015-02-19}}</ref> |
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The corporate tax component, referred to as the business cash flow tax, levies taxes on company sales while excluding material expenses and wages. This approach is designed to incentivize businesses to invest in advanced equipment and technology by not subjecting such investments to taxation. |
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Bradford states the X tax could alleviate the complexities and avoidance issues plaguing the existing U.S. system,<ref name="princeton">{{cite web|url=http://www.princeton.edu/~ceps/workingpapers/93bradford.pdf |title=The X Tax in the World Economy | publisher=[[Princeton University]]|last=Bradford |first=David F. |date=August 2003|access-date=2007-08-28}}</ref> and argues that "the government should exempt from taxation all [[dividends]], [[interest]], and other [[income]] from [[savings]]. That way, people will be treated equally by the tax system, whether they choose to spend now or save to increase their future spending power."<ref name="bw"/> |
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The personal tax component, referred to as the household wage tax, involves a progressive structure, with tiered rates that peak at a level equivalent to the corporate tax rate. Individuals or households are taxed on their earned income, with deductions based on family size, making the X Tax more progressive compared to other [[Consumption tax|consumption taxes]].<ref>{{Cite book |last=Viard |first=Alan |title=Progressive Consumption Taxation: The X Tax Revisited |last2=Caroll |first2=Robert |publisher=AEI Press |year=2012 |isbn=9780844743943}}</ref><ref>{{Cite web |title=What is the X-tax? |url=https://www.taxpolicycenter.org/briefing-book/what-x-tax |access-date=2023-05-10 |website=Tax Policy Center |language=en}}</ref> |
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The X Tax is intended to streamline the tax code, foster economic expansion, and preserve progressive taxation. Additionally, it seeks to stimulate savings and investments by eliminating double taxation. Under the X Tax, [[Financial transaction|financial transactions]] and [[Financial instrument|instruments]] are not subject to taxation for both individuals and corporations. Bradford argues that "the government should exempt from taxation all [[dividends]], [[interest]], and other [[income]] from [[savings]]. That way, people will be treated equally by the tax system, whether they choose to spend now or save to increase their future spending power."<ref name="bw">{{cite news |last=Coy |first=Peter |date=2003-03-09 |title=Beyond Bush: A Simple Plan to Tax Consumption |newspaper=Bloomberg.com |publisher=[[Business Week]] |url=https://www.bloomberg.com/bw/stories/2003-03-09/commentary-beyond-bush-a-simple-plan-to-tax-consumption |access-date=2015-02-19}}</ref> |
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==See also== |
==See also== |
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Revision as of 06:00, 10 May 2023
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The X Tax is a proposed approach to taxation conceived by Princeton University economist and New York University School of Law professor David F. Bradford,[1] It consists of two taxes.
The corporate tax component, referred to as the business cash flow tax, levies taxes on company sales while excluding material expenses and wages. This approach is designed to incentivize businesses to invest in advanced equipment and technology by not subjecting such investments to taxation.
The personal tax component, referred to as the household wage tax, involves a progressive structure, with tiered rates that peak at a level equivalent to the corporate tax rate. Individuals or households are taxed on their earned income, with deductions based on family size, making the X Tax more progressive compared to other consumption taxes.[2][3]
The X Tax is intended to streamline the tax code, foster economic expansion, and preserve progressive taxation. Additionally, it seeks to stimulate savings and investments by eliminating double taxation. Under the X Tax, financial transactions and instruments are not subject to taxation for both individuals and corporations. Bradford argues that "the government should exempt from taxation all dividends, interest, and other income from savings. That way, people will be treated equally by the tax system, whether they choose to spend now or save to increase their future spending power."[4]
See also
Notes
- ^ Bradford, David (2004-08). "The X Tax in the World Economy" (PDF). Cambridge, MA.
{{cite journal}}: Check date values in:|date=(help); Cite journal requires|journal=(help) - ^ Viard, Alan; Caroll, Robert (2012). Progressive Consumption Taxation: The X Tax Revisited. AEI Press. ISBN 9780844743943.
- ^ "What is the X-tax?". Tax Policy Center. Retrieved 2023-05-10.
- ^ Coy, Peter (2003-03-09). "Beyond Bush: A Simple Plan to Tax Consumption". Bloomberg.com. Business Week. Retrieved 2015-02-19.
External links
- "Bradford's Princeton Homepage". 2007-09-16. Archived from the original on September 16, 2007. Retrieved 2021-06-20.
- Bradford's Working Papers, National Bureau of Economic Research
- Carroll, Robert; Viard, Alan D. (2012). "Progressive Consumption Taxation: The X Tax Revisited" (PDF). American Enterprise Institute. Retrieved June 20, 2021.
{{cite web}}: CS1 maint: url-status (link)
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