Archer Proposes Replacing Income Tax With a Levy on Consumption
The chairman of the House Ways and Means Committee, Rep. Bill Archer (R-Texas), plans to unveil a detailed proposal this fall to replace the federal income tax with a tax on the consumption of goods and services.
The proposal, to be written after a wide-ranging series of hearings through the year, probably will emerge as the chief rival to the flat-tax idea.
In a speech to an insurance industry group, Archer said Wednesday he hopes to see his plan written into law next year.
“I intend for 1996 to mark the beginning of the end of the income tax,” he said.
To replace the income tax, Archer said he favors a border-adjustable consumption tax, meaning it would be levied on goods and services consumed in the United States, including imports. Exports would be exempted.
Archer has not said whether it will resemble a national retail sales tax levied on sales to consumers or whether it will look like a value-added tax.
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