tax gap

Could moving from an income tax to a national sales tax or value-added tax help close the gap between the amount of taxes people should pay and the amount they actually pay?

Yes, taxes would be much more difficult to avoid and compliance would improve. In effect, the merchant becomes the tax collection agent and collects the tax at the time the tax liability is due. Additionally, the cost of collecting these taxes would be much less than collecting federal income taxes, unless, of course, Congress adds special provisions to these relatively simple taxes.

Michael W. Butler, PhD, Professor of Economics, Angelo State University, San Angelo, Texas