Thanks to Kate Braun for this snippet.
Do you want a National Sales Tax in addition to your state sales tax? Presidential candidates Ron Paul and Mike Huckabee do. They support a bill by John Linder (R-GA) to institute a national sales tax of 30 cents on the dollar. It would abolish the Income Tax and the IRS. Before you say, “Hurray”, make sure you are in the top 20% in income, as the bottom 80% would be worse off. The best-off 1% would be better off by about $225,000 each per year.
The national sales tax would apply to all transactions, including groceries, rent, new homes, medical care and gasoline. A new bureaucracy would be formed to administer it, with the authority to audit any person or business. They would give a rebate at the end of the year to those below the poverty line. The poverty line is way below the actual level of poverty. How many purchases would people have to forego because they could not afford them? What would that do to our economy?
Most people don’t know about this because the candidates refer to the national sales tax as a “consumption” tax or as the “Fair” Tax. People don’t know what this means, and the pundits don’t ask them about it.
The Institute for Taxation and Economic Policy figures that a sales tax could not replace the income tax unless it was 45-57%.
