> “If we do not capture a bit of this flow (in both directions), we will find the individuals (or companies) going offshore for the other side of the transaction.”
Oh really? So if we buy goods overseas for our use purposes at home, how do you propose getting these goods back into the USA? Smuggling? Are you suggesting that all American companies and individuals become lawbreakers?
I don’t know about you but if I buy a car overseas and ship it back here i will end up paying more especially when I try to register it and have to pay customs.
Do you currently report all items purchased on the internet that are brought into your state? In AZ, we are supposed to report the total of OOS purchases so that a "use" tax can be assessed. Most people claim "O" purchases made. UPS delivers worldwide.
And, vehicles (such as Volvo) can be "overseas delivered" with a trip over to pick up, drive and ship back. The cost is actually lower than US delivery (well, it was a few years back). The customs is lower due to it being a "used" car.
But, you miss my point. If we abandon income tax altogether, then those who receive in-flow will escape tax altogether if they purchase overseas. Do you think a yacht purchased in the Caribbean will be taxed for the US consumer? Do you want the US Coast Guard to become the IRS?
Right now, the low income folks can escape taxation, which does not seem fair. If the Fair Tax is implemented, the rich will escape tax and that does not seem fair. Both are needed, but not a 28% rate and not by itself.