An extra 5% added to the sales tax would make it 14% in most places. Retail businesses would disappear as people did all their shopping online or on trips across state lines.
We need to go in the other direction — REDUCE the sales tax rate down to 5% total but have it apply to ALL goods and services. At the same time, retain the income tax, but reduce it to a flat 3% rather than the 5.8% Laffer suggests. His 5.8% figure is only required because he leaves the sales tax as-is — the current base includes less than 30% of all purchases because rents, groceries, utilities, and virtually all services are excluded. The current sales tax base is the epitome of attempting to tax the “rich” — no tax on “necessities” but high tax on “conveniences” and “luxuries”.
I’d be interested in how Laffer adjusted for the fact that so much income is not being reported because it is going to illegals under the table. His 5.8% seems high to me so I assume he left all the illegal income as untaxed.
The only viable option for real tax reform is to trash the income tax(both individual and corporate) altogether and drastically reduce the IRS and it's powers to screw over US citizens.
The reduction, or even the elimination of the IRS and replacing it with some other agency with only the power to collect sales taxes, would save millions of dollars a year. Not to mention eliminating one of the weapons that the feds use to intimidate each other and to use as a weapon against anyone who disagrees with them.