“The public finance literature is clear that a consumption tax would minimize government’s distortion of private economic decisions and thus be the least economically harmful way to raise federal tax revenues.”
Citation: Project 2025, Section 4.2: Department of the Treasury, William L. Walton, Stephen Moore, and David R. Burton, page 730, paragraph 2
Context:
Consumption taxes are levied on what you spend, rather than what you earn. The theory is that it encourages people to spend less and save more. But this is also a regressive tax – if you live paycheck to paycheck and can’t save anything, you’re just being taxed even more on what you’re being forced to spend. There’s a huge equity problem here.
Full contextual analysis of Section 4.2: Department of the Treasury here.
Categories: Taxes