We present a model of optimizing government behavior in which a need for increased revenue leads to the introduction of a new revenue source, such as a VAT, accompanied by a reduction in income taxes. We argue that this is a plausible outcome for the United States, in view of international...

List of illustrations -- Acknowledgments -- Introduction -- Why tax consumption? -- The case for the X tax -- Maintaining progressivity -- Fringe benefits and transfer payments -- Business firms -- Financial services -- International transactions -- The transition -- The nonbusiness sector --...