So, exceptions for businesses ARE allowed - the costs to generate revenue such as mortgages, building improvements, etc...!
But, to the average American, they are just going to get screwed at a flat 10% - regardless of their need and necessity to have a mortgage, make building improvements, etc...!
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So the landlord is a business and gets to deduct taxes as an expense, the renter doesn’t have that tax on tax built into his rent. However the homeown does receive that tax on tax.
And so you see one of many reasons this won’t work and will not be passed.
That is my point. In theory, it sounds great; hell, in the past, I was screaming that this was a really good idea.
But, I stepped back and looked at the reality of it, and it would be inherently BAD for individuals and a complete KILLER to any new start-ups. Especially sole proprietors who do not, at least, file an LLC at the very beginning of their endeavor!