Would there be a sales tax on a house? Bad enough to pay 6%-8% on a $20,000 car---and that's only state/local, what would it be if you added a federal sales tax?

Is it going to cast an extra $25,000-$50,000 to buy a $250K house? How about apartment rents?

Inflation's coming again - we're really back to the 70s.

I wouldn't mind at least a 1% national tax to bring out some of that underground economy.

This thing would gore so many ox, the squeals of pain would lead to mass hearing loss.

Education isn't a consumer good, it's a capital good.

It's like a suit--you're required to have it to get a job, but it serves no actual purpose other than cultural.

Taxing wages and savings rather than consumption is inefficient and wasteful. Aside from the costs to basic liberty there are compliance costs which are ridiculously high. In a relastively high tax state, a consumer earning about $60,000.00 needs to earn approximately $17,000.00 gross in order to purchase a $10,000.00 automobile. The concerns with "progressivity" are misplaced. The most challenging aspect of life today among those in the middle class is capital formation through savings. A consumption tax puts the decisions regarding saving or spending back in the hands of the individual where it belongs. If the federal government currently consume about 23% of GDP and the tax on consumption came in at about 28% with some exempted sectors, revenue neutrality can be maintained while liberty and capital formation would be enhanced. Natural checks on the cost of government would evolve since the interests of government and the productive sectors of the economy would merge. The export sector would also benefit greatly since the current costs of taxing corporate "income" would no longer exist. The effects on job creation in what was once the greatest manufacturing power in history would be enormous. The rather utopian desire for perfect "fairness" is unattainable. Enhancing freedom is more important than distorting economic incentives which has reached grotesque proportions through the taxation of work, wages and savings in the name of "economic justice".

oj:

You say that because you're bad at math, but take it from me, education is useful for more than being able to make witty comments and pithy observations.

(Although those are fun too).

Math? Don't they have computers where you work? Is there a workplace in America that favors human calculation over human?

The fact that this is even being discussed seriously is as sure an indication of imperial overstretch on the part of the right as I can think of. And I'm a part of the right (or at least I used to consider myself as such, although they may be getting ready to disown me in favor of greater ideological purity). A national sales tax (as opposed to a flat tax) is one of the worst ideas ever. The economic dislocations in the bond, equity, and real estate markets that would occur if it were ever to pass, and the vast underground economy that would then arise to avoid it, would cripple our economy for decades.

I'm with HT on this one and would add markets beyond those he mentioned as being "dislocated."

Disclosure: I live in NH, a sales tax free state.

If we take all the oxen at once and make hamburger, so much the better.

Hold a public commission and make the K Street crowd and those who love them explain on TV cameras why we subsidize all manner of things through the tax code, why we need an unintelligible, irrational, indecipherable grab-bag of regulations. Put them on C-SPan every day. Let them be on CNBC every day. Let them explain to the American investor class why all this nonsense is on-going.

I've got the popcorn and the Merlot, let the party begin.

HT overstates the "dislocations" in the bond, equity and real estate markets. Taxing consumption rather than income (as defined by whoever) and savings would correct the massive distortions under which the economy currently operates. The housing market for example reamins strong largely due to the most favorable capital gains treatment on primary homes in 70 years. Imagine if work and savings were treated like that. The idea that taxing "income" gets the wealthy to "pay its fair share" is ludicrous.

I feel for the accounting, whole life insurance, muni bond, tax law industry and annuity salesman as much as the next guy but continuing under one of the 19th century's most harmful innovations for their sake is nuts.

Please. Anyone who has taken an economics course understands that taxing something more means that it will happen less. So if you tax consumption consumer spending will decrease. That's two-thirds of the domestic economy. Hello, recession.

Also, this new paradigm will make suckers of everyone who put money into a 401K or municipal bond, or bought a house based on the deductibility of their mortgage payment.

Unless, of course, their are EXCEPTIONS for certain classes of economic activity. Hello, lobbyists.

No matter which way you slice this, it doesn't work.

HT:

Yes, consumption decreases somewhat but savings boom.

Bulletin: there is no economic benefit to a savings boom. In fact, if there were, Japan would be the most prosperous nation on earth. We live in a demand-driven economy. No demand, no economy.

Corporate America is already sitting on hundreds of billions of dollars that they do not want to reinvest, because existing capacity can keep up quite well with demand, thank you (notice that there's no inflation to speak of). Adding trillions more to the pool by choking off demand and re-routing it into savings plans or government coffers through a hugely regressive and recessive tax plan isn't going to earn you one thin dime of additional return.

I'd say that this was the goofiest idea since the flat earth society or intelligent design(ism), but somehow I'm guessing that would fail to sting.

HT:

Those nations don't save anything. We have the highest savings rate in the world. The point is our savings are stocks.

HT doesn't get it. Choking demand is a fantasy. The funds are no longer witheld from salaries and wages. Estimated-quarterlies are no longer fronted to the feds. The decisions regarding spending and taxes would remain with the individual while the time spent working to pay federal taxes would be reduced substantially (see the above example regarding the $10,000.00 car)

I am in the financial services business and the amount of time and effort directed toward minimizing taxes through the use of financial products which serve no othet puropse is staggering. The Keynesian belief that throwing money from the skies or digging and refilling ditches to create employment is based on the sqame logic which says the state taxes wealth through the income tax system. It is complete nonsense. The current system has made the good ol'USA into a nation of financial chiselers. Supplying those finacial products is a good business and about as productive as any make-work project.

Sorry, the anonymous entries were mine.