I immediately see 4 issues.
FT foists collection costs to the states. Are the states adequately compensated by the Feds?
What about those states that don't have a sales tax? Do you think that will cause any disruption to those states (Don't go off the reservation complaining that US citizens in those states don' t count 'cause you have never been there. That's a personal problem - not necessarily addressed to MM, but to others who want to chime in).
Some states who do have a sales tax have exemptions (e.g food, services). Do the FTers have ANY idea what those states may do to their ST exemptions?
Then there is the state IT issue as pointed out. Many state ITs are tied to the Fed IT. What ARE those states expected to do?
It would be good to have this all, among likely many other issues, BEFORE we go down this path.
“Some states who do have a sales tax have exemptions (e.g food, services). Do the FTers have ANY idea what those states may do to their ST exemptions?”
There will be a number of incentives for states to harmonize their tax systems with the FT. That means, among other things, that they would abandon their extremely inefficient system of exemptions and adopt a rebate system. There are already several states (GA and MI) where there is considerable support for such a change. There is no requirement, of course, that they do so. I suspect that any states holding on to their exemptions will abandon them within a few years of the FT going into effect.
“Then there is the state IT issue as pointed out. Many state ITs are tied to the Fed IT. What ARE those states expected to do?”
They can either harmonize their tax system with the FT (meaning eliminate their IT) or they can develop their own Internal Revenue Code from the ground up ( a daunting undertaking for a part-time state legislature, both practically and politically). This is why we say that most Americans will get to keep their entire paychecks (including state deductions).
When we succeed in repealing the 16th, states won’t be able to continue taxing income, anyway.
I HOPE that you aren’t saying that we should retain a highly dysfunctional tax system at the federal level so that states won’t have to abandon their own dysfunctional system.