There have been many proposals over the years for a new tax plan. These tend to fall into three main categories:

1) Tax Simplification

2) Flat Tax

3) Sales or Value Added Tax

Many alarmists have tried to claim that certain proposals would eliminate business deductions which is nonsense. Any tax system that eliminated business deductions and taxed business receipts as opposed to profits would put most of the businesses in the country out of business and therefore would never pass even if someone was so crazy as to propose it.

Tax Simplification. This is just more of the same thing we have been doing over the years, trying to take all the complications and special interest BS out of the code. It never works very well, and Congress always complicates things again. (Of course they could also complicate any of the other proposals as well which is why we must always pay attention to what they are doing.)

Flat Tax. In theory this means everyone pays the same amount of tax without any of the different percentage rates we currently have. The more extreme versions of this also eliminate all personal deductions. Many versions make this "flat tax" actually progressive by providing a large personal deduction. Congress will be under enormous political pressure to keep at least home mortgage and charitable deductions.

Sales Tax or Value Added Tax (VAT). A sales tax is only applied at the end of the production chain where the item is sold to the end consumer. Goods purchased that will become part of something that is later sold are not taxed, but goods purchased for use in a home or office are taxed. This is exactly like how all our State and City sales taxes work currently and everyone understands them.

By contrast a VAT is imposed on every business at every step of the manufacturing process. The concept is that every business pays the VAT on everything they buy, and then collects the VAT on goods they sell. However, they must remit to the Government not the full amount of the VAT collected but instead the amount of VAT collected minus the VAT they paid on the goods purchased that became part of what they sold. Therefore the net tax collected at each stage is on the "Value Added" by each company. However it is also a tax on inventories since you have paid the full tax on good purchased and don't get it back until you sell them. This gets complicated and the record keeping involved is an additional "invisible" tax on all the businesses. Europe has VAT and many of our liberal Welfare State proponents who want to make us more like Europe want a VAT not to replace the income tax but in addition to it to allow the government to take more of our money.

I think both ideas are non-starters in the USA since we rightly would not trust the Federal Government to collect either a Sales or VAT as a replacement for the income tax unless the 16th Amendment to the Constitution that allows the Federal government to collect direct taxes on Income were first repealed.

The only way this could work is if the National Sales tax were passed but made conditional so it would only take effect the day that the 16th Amendment was repealed by the States.