We are independent & ad-supported. We may earn a commission for purchases made through our links.

Advertiser Disclosure

Our website is an independent, advertising-supported platform. We provide our content free of charge to our readers, and to keep it that way, we rely on revenue generated through advertisements and affiliate partnerships. This means that when you click on certain links on our site and make a purchase, we may earn a commission. Learn more.

How We Make Money

We sustain our operations through affiliate commissions and advertising. If you click on an affiliate link and make a purchase, we may receive a commission from the merchant at no additional cost to you. We also display advertisements on our website, which help generate revenue to support our work and keep our content free for readers. Our editorial team operates independently from our advertising and affiliate partnerships to ensure that our content remains unbiased and focused on providing you with the best information and recommendations based on thorough research and honest evaluations. To remain transparent, we’ve provided a list of our current affiliate partners here.

What is the X Tax?

Malcolm Tatum
By
Updated May 16, 2024
Our promise to you
SmartCapitalMind is dedicated to creating trustworthy, high-quality content that always prioritizes transparency, integrity, and inclusivity above all else. Our ensure that our content creation and review process includes rigorous fact-checking, evidence-based, and continual updates to ensure accuracy and reliability.

Our Promise to you

Founded in 2002, our company has been a trusted resource for readers seeking informative and engaging content. Our dedication to quality remains unwavering—and will never change. We follow a strict editorial policy, ensuring that our content is authored by highly qualified professionals and edited by subject matter experts. This guarantees that everything we publish is objective, accurate, and trustworthy.

Over the years, we've refined our approach to cover a wide range of topics, providing readers with reliable and practical advice to enhance their knowledge and skills. That's why millions of readers turn to us each year. Join us in celebrating the joy of learning, guided by standards you can trust.

Editorial Standards

At SmartCapitalMind, we are committed to creating content that you can trust. Our editorial process is designed to ensure that every piece of content we publish is accurate, reliable, and informative.

Our team of experienced writers and editors follows a strict set of guidelines to ensure the highest quality content. We conduct thorough research, fact-check all information, and rely on credible sources to back up our claims. Our content is reviewed by subject matter experts to ensure accuracy and clarity.

We believe in transparency and maintain editorial independence from our advertisers. Our team does not receive direct compensation from advertisers, allowing us to create unbiased content that prioritizes your interests.

As a term that was first introduced by Professor David F. Bradford of Princeton University, an X tax is defined as a type of progressive value-added tax system. The conjecture by David Bradford was that this structure of a graduated consumption tax process could replace the current tax system in place for alien corporations that operate in the United States. Here are some basics of the X tax system, as outlined by Dr. Bradford in several of his key papers on the subject.

The idea behind the implementation of an X tax would make it possible to collect taxes at several different intervals during the manufacturing process. Essentially, the X tax would be imposed each time the product changed hands. The first round of X tax would be imposed on the raw goods used to create the products offered by the company. A second segment of the X tax would be due on the increase in value that took place as a result of using the raw materials to create a viable product that could be marketed and sold. The final leg of the X tax would come about based on the actual sale prices of the products, after the products are actually sold to the consumer.

Often referred to as a value-added tax system, or VAT for short, the X tax is already used within the internal tax systems of a number of countries around the world. Generally, foreign visitors to the country that consume goods that are manufactured domestically can apply for and receive a refund after they have completed their visit to the country.

Rather than complicate the tax process further, Bradford postulated that the implementation of an X tax for the United States would in fact simplify the collection of taxes from businesses. In his writings, Bradford comments that the implementation of an X tax would create steady tax revenue for the country that was easily documented and tracked, something that he did not feel the current system was able to do as efficiently. Also, the structure of this form of cumulative or progressive tax would help position the United States to be more competitive economically with other countries around the world that had already implemented a similar tax structure.

While there is a great deal of debate on the feasibility of implementing an X tax within the United States, it is clear that similar progressive tax systems are working very well in other parts of the world. As a well-respected economist and tax expert, Dr. Bradford established a solid reputation before his death in 2005. Through his writings, Bradford gained many supporters for his concept, many of whom continue to use his writings in the interests of seeing reforms in the current United States tax system.

SmartCapitalMind is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Malcolm Tatum
By Malcolm Tatum , Writer
Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing to become a full-time freelance writer. He has contributed articles to a variety of print and online publications, including SmartCapitalMind, and his work has also been featured in poetry collections, devotional anthologies, and newspapers. When not writing, Malcolm enjoys collecting vinyl records, following minor league baseball, and cycling.

Discussion Comments

By anon219852 — On Oct 04, 2011

You forget a major portion of the X tax which differentiates it from a standard VAT. In the X tax, wages are deducted from the firm's VAT tax liabilities and a progressive income tax is levied on wages. Pretty clever if you ask me.

Malcolm Tatum

Malcolm Tatum

Writer

Malcolm Tatum, a former teleconferencing industry professional, followed his passion for trivia, research, and writing...
Learn more
SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.

SmartCapitalMind, in your inbox

Our latest articles, guides, and more, delivered daily.