ABSTRACT
As a substitute for the income tax, including the corporation income tax, the expenditure tax becomes a mass expenditure tax, corresponding to the universal income tax, or a uniform but partial, that is selective, expenditure tax. The expenditure tax is to the income tax as the consumption type of value-added tax is to the income type of that tax. The expenditure tax is a destination-principle tax; the product of a country is not taxed in the hands of consumers if it is exported, while imports are taxed when consumed. Substitution of an expenditure tax for a value-added tax would in part advantage factors specialized in the production of necessaries relative to those specialized in the luxury trades. A progressive-rate tax on a household's total consumption expenditure is either a supplement to the income tax or a substitute for it.
