The problem is that these same people want the sales tax in addition to the pre-existing income tax.
Common around the world, including in Europe, such a tax -- called a value-added tax, or VAT -- has not been seriously considered in the United States. But advocates say few other options can generate the kind of money the nation will need to avert fiscal calamity.This is fiscal insanity without any clarity of vision.At a White House conference earlier this year on the government's budget problems, a roomful of tax experts pleaded with Treasury Secretary Timothy F. Geithner to consider a VAT. A recent flurry of books and papers on the subject is attracting genuine, if furtive, interest in Congress. And last month, after wrestling with the White House over the massive deficits projected under Obama's policies, the chairman of the Senate Budget Committee declared that a VAT should be part of the debate.
"There is a growing awareness of the need for fundamental tax reform," Sen. Kent Conrad (D-N.D.) said in an interview. "I think a VAT and a high-end income tax have got to be on the table."
Here's what should be done: scrap the income tax completely. Doing so would boost the economy in ways that hardly anybody can possibly imagine. It would free up a massive portion of the individual and small business sectors to re-engage in private enterprise. Then have a national sales tax, which is equitable across the board and with no regard to "income brackets". And for good measure, slash corporate tax rates so that more American businesses will be enticed to bring their industries back to the United States.
If those things are done, there will be a domestic financial renaissance the likes of which has not been seen in recent memory.
But to pile new taxes upon those which are already too burdensome for most Americans is to invite inevitable disaster.