I am not sure the law says that.
I realize you don't understand, as you wrote, "lots of gobledygook". Nonetheless, SEC. 804 deals in part with not allowing a leased item being sold to circumvent paying the tax on the value of a new product. A $10,000 new car that has a $3,000 tax compared to a leased car sold six months into the lease. A portion of the lease payment is principle. Say for example $1,000. When the leased car is sold the fair market value would be about $9,000 and the tax applied to that. Also, the lease company remits a tax for it's lease services.
Also, I am sure that the level of *visible* goods and services at the retail level would go down and we would have to charge a higher rate.
Raising the tax rate will be very difficult. People back East in Western New York, Eire county, are hammering the county legislature for trying to raise the sales tax by 1/4 of one percent. I heard a similar scenario happened in Wisconsin dealing with the state sales tax. I think the visible goods and services would remain about the same with only minimal swing up or down.
You have just raised the price of everything 30%. The amount retail sales would certainly fall. taxes collected would fall short fot this reason.
Lots jewelry being bought overseas. lots of stuff be sold as used, but highly refurshed. difficult to police. Are going to bust open computers with used cases to what is inside?
A drastic 30% increase would see retail sales as we know fall dramatically. I think it would similiar to the EU with their 19% or so sales tax.
your sec 804 example did not address the 50% rule and an easy way around it. just make stuff more expensive new, rent it out for a short time and then book a large amount of depreciation suitable for sale in the used market. cars loose most of thier value the first year.
Think about this. Company sets up a datacenter in canada to save the 30% price of blade oards. Then ships the boards to be sold as used computers in the us.
Same could be done for furniture jewelry. We just use the world's hand me downs.
Look what happened with the lux boat biz. All that stuff would be made overseas.
Incidentally, I have the same elasticity issues with the way europe taxes INCOME. They used static analysis and fall short because of all the underground jobs that go on whilst folks collect welfare. (car repair, haircuts plumbers) That is why they work fewer hours than in the us. this has been noted by the edward prescott paper.
You realize of course that there are plenty of ways around that. For example, I and my neighbor can each rent a car, and then each buy the other's car used from the agency. You'll be surprised how inventive self-interested humans can be.