Abstract: A method of taxation comprising the following steps: changing consumption tax rates at short intervals of time; applying the consumption tax rate in effect to every taxable transaction that occurs during that short interval of time; setting progressive income tax rates to be in effect for a long interval of time; and applying the progressive tax rate in effect to all taxpayer yearly incomes equal to or greater than a predetermined progressive tax minimum income. Taxpayers who file a statement declaring yearly income less than a consumption tax minimum income will receive a refund of consumption taxes paid; while those who file a statement declaring yearly income equal to or greater than the consumption tax minimum income, but less than the progressive tax minimum income, will receive a rebate or credit for consumption taxes that is regressive. Surplus consumption tax revenue is held in a buffer reserve and later used during intervals of time during which a shortfall in consumption tax revenue has occurred.