"Substantial, sudden change like that is NEVER good for an economy."
When Congressman Linder met with Chairman Greenspan about a year ago to go over the FairTax proposal, Mr. Linder started going over the economic benefits. Mr. Greenspan interrupted him to say that he didn't need to do that, since he had gone over the proposal, was familar with its economic impact. He then went on to say that he doubted that you would find an economist anywhere who would disagree, but that the real obstacle would be overcoming the enertia inside the beltway in DC and the tremendous resistence to change.
Of course, Mr. Greenspan was incorrect about not finding an economist anywhere who would argue against the proposal. There are economists who will argue against anything. In addition, as your post so vividly demonstrates, resistence to change is not limited to Washington, DC.
The economic benefits would be enormous.
Again, I am all in favor of a federal sales tax if implemented in two ways:
1. The income tax would be repealed, requiring a constitutional ammendment to re-instate it.
2. It was absolutely flat. No refunds, no reason for the federal government to even concern themselves with how much income you collected.
I am not interested in replacing one beauracracy with another one, full of exceptions and loopholes. I want this tax SIMPLE and COMPLETE. I want the taxpayer to see just how much tax they are paying. No hidden taxes. I also want the ability to control my taxes in ways other than reducing my income.
I'm all for the change. But I firmly side with Greenspan that it isn't going to happen. As I used to say when I was in high school (1972), the US is like the proverbial farmer with his arm caught in a piece of machinery. If he does not pull out his pocket knife and cut his arm off, his whole body is going to be drug in and he will be killed.
Nobody has the political will to unsheath the blade. The farmer is going to die.