[kevkrom]

Anyone who today has assets left after all income and payroll taxes have been paid would be subject to the same federal sales tax as folks receiving new untaxed income. In short, this proposal would subject all current assets already taxed under current law to a brand new sales tax on all purchases. That's a pretty effective to raise significant new revenue for the government. Good for young folks with no assets. Bad for old folks with big (previously taxed) assets.

"Assets" is probably a poor chocie of words -- selling a previously taxed item, whether or not that tax was paid pre-NRST or post-NRST would not be subject to being taxed again.

Now, converting assets to cash and using that to buy new goods and services... yes, that would then be subject to the NRST. However, that is little different from today, where the income tax acts as a hidden VAT on goods and services. The only real difference is that the tax is explicit instead of implicit. The amount of the embedded tax should be roughly the same either way (probably within a few percent of each other).

I'll be the first to admit that the transition period could be a little strange, but I don't think anyone is going to be shafted as a result.

[labard1]

Let me clarify my comment. Hypothetically, I have worked for 40 years and built up a large pile of US dollar bills after paying all income and payroll taxes. Your new tax regime is enacted. You are a new worker, and will not be subject to any income or payroll taxes, ever. You can therefore build up a pile of US dollar bills that will not be taxed until spent.

Yet when we now buy things, our dollar bills are both subject to the same new federal sales tax. You should be happy about that. I will not be, because I have been taxed on income when I earned my dollar bills and taxed again when I spent them, whereas you have been taxed only when you spent your dollar bills.

I'm not going to like your tax plan.