[phil_will1]

"It's not clear to me and I don't think it will be clear to the voting public how the consumption tax will help in the battle against offshoring.."

The consumption tax may not help prevent offshoring; it would change the pricing dynamic for goods, rather than services. The point I should have been clearer about is that if the demand for our hard goods goes up dramatically, the offshoring of labor wouldn't be felt so much. On the other hand, it isn't clear to me what a 1% tariff on goods and services, even if practical (and I'm not sure it is), would accomplish.

[CompProgrammer]

Here is Pearlstein's column where I saw his idea for a 1% tariff.

http://www.washingtonpost.com/ac2/wp-dyn?pagename=article&node=&contentId=A49659-2004Feb17&notFound=true

I wrote an email to Pearlstein, but he has not responded.

[ninenot]

The consumption tax CAN be helpful. C Corp's will NOT have to pay income tax, which would allow (e.g.) Ford Motor to drop its prices by about 15%.

While consumption in general will be negatively affected by a 23% tax, the volume of imports will be reduced--while at the same time, exports of US-manufactured goods, now free of the cost of US Income Tax, will go up a bit.

While it's probably not fair to state that the consumption tax would be a net POSITIVE for jobs in the USA, it's not likely to hurt them.