Working Papers
The Anatomy of Capital Returns over the Very Long Run: Germany, 1465–2025
Economics Working Paper 26128
November 6, 2026
Published September 12, 2023
A uniform consumption tax would allow the government to raise revenue with minimal impact on the economy. It would replace personal, corporate, and estate taxes, operating as either a national sales tax or a value-added tax. The tax would simplify the tax code, incentivize savings and investments, eliminate complex tax maneuvers, and promote transparency in politics.
Discussion Questions
- Why do some people believe that a consumption tax is unfair? Are they right or wrong?
- Assuming a tax is needed, which form of taxation has the least harmful effect? Which one has the most harmful effect? Why?
Additional Resources
- Read “A Consumption Tax Is the Shock Our Broken System Needs,” by John Cochrane via the Wall Street Journal.
- Watch “Does Government Debt Matter Anymore?” with John Cochrane on PolicyEd.
- Read “Myths of Economic Inequality” by David Henderson.
- Read “‘Trickle Down’ Theory and ‘Tax Cuts for the Rich’” by Thomas Sowell.
- Watch “How Government Policy Inflates Health Care Costs: The Curse of Cross-Subsidies” with John Cochrane on PolicyEd.
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