Cato Policy Analysis No. 272 April 15, 1997

Policy Analysis

Emancipating America from the Income Tax:
How a National Sales Tax Would Work

by David R. Burton and Dan R. Mastromarco

David R. Burton (J.D. University of Maryland) is a partner in the Argus Group, a Washington-based law and public policy firm. Dan R. Mastromarco (LL.M. Taxation, Georgetown) is a partner in the Argus Group and an adjunct professor at the University of Maryland, International Management Program.

Executive Summary

This study demonstrates how the individual and corporate income tax, the capital gains tax, the estate and gift taxes, and non-trust-fund excise taxes all could be replaced with a national sales tax (NST). The NST would exempt low-income Americans from tax and raise the same amount of revenue currently collected. The ideal NST plan would include the following features:

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