Define the flat tax or the national consumption tax, and identify and explain which one is a more extreme change to the federal income tax system.
What will be an ideal response?
The flat tax is the simpler of the two (flat tax vs. the national consumption tax). This tax is a tax assessed on all income, regardless of the source, eliminating almost all deductions and loopholes for expenditures. This is the more fiscally neutral of the two taxes included in this question. The national consumption tax is the more extreme solution to the problems inherent in the federal income tax system. The consumption tax, or the value-added tax, would replace the income tax. The logic of the consumption tax is that it places the burden on spending rather than on earning money.
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