This paper examines the welfare consequences of changing the current U.S. income tax system to a progressive consumption tax. We compute a sequence of single period equilibria in which savings decisions depend on the expected future return to capital. In the presence of existing income taxes,...

The income tax system has become quite a mess. Unfortunately, the brunt of that mess falls primarily on the backs of the individual taxpayers, who are required to sift through the tens of thousands of pages of instructions and tax rules just to calculate, file, and pay what they owe. The filing...