What makes you think the sales tax won't do exactly the same thing.
For one thing, there are many cities on the American/Mexican border. Alot of towns on the Mexican border already subsist by catering to American money (think Tijuana). Now, given this, and given the fact that in Mexico, everything is cheaper by default, the question soon comes.
If someone lives in say, El Paso, and they're saddled with the 23 percent national sales tax, and for the sake of argument (because I dont know what it actually is), Texas adds 6 percent.
So 29% sales tax. Now, let's say their is an item you want, and the exact identical item is sold in Ciudad Juarez. Same quality, same everything. And (this part is odd because Mexico is cheaper, but sake of argument) supposed, both items are valued at $100.
And let's suppose Mexico doesn't have a sales tax (once again, I don't go frequently enough to know if they do or not)
So, in both Ciudad Juarez and El Paso, you have the $100 item.
In El Paso, this item will cost $129 because of the sales tax, and in Ciudad Juarez, the item will cost $100.
Now tell me something, what do you think an El Pasoite would do in this situation. Stay in the good ole US of A and pay an extra $29, or, go shopping in Ciudad Juarez and get a great bargain.
Now tell me something, what do you think an El Pasoite would do in this situation. Stay in the good ole US of A and pay an extra $29, or, go shopping in Ciudad Juarez and get a great bargain.
Is a $30 dollar savings going to offset the time, hassle, and expense of traveling to Mexico, the time spent shopping, and the time, hassle, and expense of traveling back to the US? And if Mexico is currently greatly cheaper, why isn't everyone on the border already purchashing their items in Mexico?
Now tell me something, what do you think an El Pasoite would do in this situation. Stay in the good ole US of A and pay an extra $29, or, go shopping in Ciudad Juarez and get a great bargain.
Actually, the border patrol gets beefed up, cutting down on illegal aliens as well as assure the proper tax is collected or use and consumption of goods and services in the United States.
That my friend is a two-fer, gotta find jobs for all those laid off IRS agents you know. Border Patrol and Customs seems to be a profession right up their alley.
H.R.25Fair Tax Act of 2005 (Introduced in House)
SEC. 101. IMPOSITION OF SALES TAX.
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