A credit–method value – added tax, a payroll tax, and a business – level wage subsidy can approximate the economic and distributional consequences of a subtraction – method X – tax. Such a credit – method progressive consumption tax has administrative advantages as compared to a...

If a VAT were chosen to supplement or replace some portion of the revenue from the income tax, a choice would likely be made between the credit-invoice method and the subtraction-method for calculating VAT liability. Credit-invoice method VATs and subtraction-method VATs are, at a conceptual...