CAN A NATIONAL SALES TAX ELIMINATE THE CURRENT INCOME TAX SYSTEM?

Ronald A. Stunda
Valdosta State University

ABSTRACT

During 2019, 60 Fortune 500 companies avoided all federal taxes. Overall $16 billion in
federal income taxes would have been collected by the U.S. Treasury if these companies had paid
the statutory 21 percent federal tax rate. Add the fact that the average tax rate paid by the top 400
incomes for individuals in the same year was only 13%, when the top rate stands at 37%. Had a
national sales tax been in effect for the year 2019, instead of the current income tax system, an
additional $513 billion would have been collected by the U.S. government in corporate and
individual federal taxes. This study analyzes the effect of eliminating the current income tax
system and replacing it with a national sales tax.

Keywords: National sales tax, elimination, current income tax system,