[Willie Green]

While I think the national sales tax is a viable substitue for the income tax, the procedure in the above sentence seems like trouble.

Statement of John G. Wilkins, Managing Director,
Barcroft Consulting Group, on behalf of National Retail Federation
Testimony Before the House Committee on Ways and Means
Hearing on Fundamental Tax Reform

Mr. Chairman and Members of the Committee:

I am managing director of the Barcroft Consulting Group and I am here on behalf of the National Retail Federation. My statement reports on the findings of a study undertaken by PricewaterhouseCoopers ("PWC") for the National Retail Federation Foundation. I was principal author of that study, which examines the economic impact of substituting a national retail sales tax ("NRST") for the federal income tax.

~~~SNIP~~~

Conclusion

If a NRST is enacted, the U.S. economy would lag behind for at least three years and employment would dip by more than one million jobs. Beneficial effects would not be felt for at least five years after adoption. While it is admirable to seek a fairer and simpler tax structure to replace the incredibly complex income tax code, trading an income tax in for a national sales tax is an experiment that could bring serious harm to a flourishing national economy. Uncertain long-run benefits are far insufficient to risk the short-run setbacks in virtually all sectors of the economy.

[Pearls Before Swine]

If a NRST is enacted, the U.S. economy would lag behind for at least three years and employment would dip by more than one million jobs.

This study doesn't come from what I'd call an unbiased source--the retail industry. If a sales tax were initiated without it being a full replacement for the current system, they'd be right, too--because it would simply be an excuse for higher taxes. But, I think a flat out assessment that the economy would shrink if taxes were collected in a different way isn't very convincing.