Therefore, we have only two alternatives left: The flat income tax and the sales tax.
True,
They have the same base: Consumption less approximately $25,000 exemption per household.
False, the Flat Tax legislation proposed taxes business capital gains, dividends, and interest income even when re-invested as well as initial capital placed into investment and individual retirement plan returns while the NRST does not tax any incomes that are placed into investment/savings or re-invested. Additionally the Flat Tax does not reach to transients in the US where the NRST does.
Those reasons alone, not even extending myself to dig into secondary sources mean the Flat Tax actually has a smaller tax base than the NRST, and impacts investment capital.
Therefore, they will affect the economy in the same way over the long run.
Untrue for the above reasons.
The reason the flat income tax wins is because it doesn't have negative monetary policy consequences in the short run.
And what negative monetary policy consequence do you figure an NRST has that your Flat Tax does not?
The net effect I see, of monetary consequence, is a strengthening of the dollar in response to foreign trade balances attracting investment flows that strengthen our markets and business infra-structure, which looking at current valuations we see to be rather down on as it is.
Many economists expect the money supply to be increased by the tax rate if a sales tax were created. Otherwise, wages would have to go down by the tax rate.
The net effect I see, of monetary consequence, is a strengthening of the dollar in response to foreign trade balances attracting investment flows that strengthen our markets and business infra-structure, which looking at current valuations we see to be rather down on as it is.
That has nothing to do with monetary policy. It only shows your ignorance.
First of all:
consumption = income - investmentTherefore, the flat tax, which taxes income - investment is the same as a direct tax on consumption. Since they are the same, they impact the economy in the identical manner. This includes foreign trade.
You have suggested that tax paid on exported items needs to be rebated in order for the flat tax to be equivalent to the sales tax. Rebating tax paid on exported items has the effect of removing exported items from the tax base. Therefore, you are arguing that:
Consumption = Income - (Investment + Exports)
I think you know which equation is correct.