Unless federal spending is reduced, and/or federal borrowing increased, there will NOT be lower taxes.
But playing along, I'll say that if retail prices are decreased, then that means the receipts that go into the federal treasury will be reduced.
What do you suppose the federal response to that will be? Do you think it might be a rate increase? You betcha. Now, what is the possibility that a rate increase will result in reduced purchasing? Hmmmmmmmm . . . .
If the NRST proponents make no allowance for these possibilities, they are being dishonest.
Bad communicating on my part. The tax rate necessary to generate the same amount of tax reveune will be lower.
I'll say that if retail prices are decreased, then that means the receipts that go into the federal treasury will be reduced..
Same misconception going on here. You will have more economic activity taxed and therefore more revenue for the same tax rate.
Retail prices are subject to market forces. You also assume that if prices are lower, total sales will therefore be lower. That's not true.
But I'm not going to accuse you of being dishonest. I think you should drop that tactic.
Certainly if you have a sales tax, tax revenue goes up and down with total sales activity. And this varies with the economy. But a tax on income also varies with the economy. So your problem here exists in both systems.