Who started that anyway?
Retirees ALREADY pay tax when they purchase. The fact that they'll pay tax when they spend their savings is nothing new. They'll spend no more on taxes under an nrst than what they pay now.
What makes you think they'll pay more due to an nrst???
Well, I for one brought it up.
When someone puts money in the bank or in a mutual fund, outside of a 401K or IRA plan, he is investing *post-tax* dollars. The investment income on those post-tax dollars is taxed at the federal level. When he withdraws money, that money is taxed at the *state* level when he buys something with it.
One could call that triple taxation.
The point I am making is twofold. First off, state sales taxes are generally far lower than the proposed 23%. Second, people have a *choice* as to where they want to live. Many people (especially retirees) choose to live in low- or no-sales tax states, and/or states with low or no state income tax.
I am thoroughly aware that state and local taxes are not the point here. However, in terms of slapping an enormous tax on savings withdrawn in order to live, the proposed federal sales tax represents an enormous amount, especially for people who are no longer receiving earned (wage) income, but who are instead living off their investments.
Yes, the investment income would no longer be taxed. But I can see where for many older people, the consumption tax would represent *more* total tax paid than the federal income tax.