[Final Authority]

In 41 you comment on the idea of keeping the income tax, and it is a good reason. The reason I say to defeat any move on levying a sales tax nationally is that in all likelihood we will still have the income tax as the sales tax can never be progressive enough for liberals and the income tax can be used to keep the "rich" paying "their fair share".

I believe the sales tax proponents will offer bills in congress to fund certain government programs such as Medicare and prescription drugs. They will suggest a tax rate of 2 or 3 percent and say that this won't be a burden as they will suggest tax credits for the "poor" to offset such additional taxes. Now can one see the problems? Then they will want to use the enactment of such a tax to make it easy to increase the sales tax rate at will. Just look to NY and MA for such history as history is instructive as it does repeat.

[phil_will1]

"I believe the sales tax proponents will offer bills in congress to fund certain government programs such as Medicare and prescription drugs. They will suggest a tax rate of 2 or 3 percent and say that this won't be a burden as they will suggest tax credits for the "poor" to offset such additional taxes. Now can one see the problems?"

I can certainly see the problem with your prediction. You have stated that economists cannot predict the economic impact of policy changes with a level of accuracy that satisfies you. You, on the other hand, can predict that tax reform advocates will change their proposals in ways that are contradictory to the principles that they are fighting so hard for.

Why don't you stick to bashing the proposal that has been made, rather than setting up straw man arguments?

[lewislynn]

Then they will want to use the enactment of such a tax to make it easy to increase the sales tax rate at will.

You're more right than you know. It's already in their bill.

Here it is:

`(d) OLD-AGE, SURVIVORS AND DISABILITY INSURANCE RATE- The old-age, survivors and disability insurance rate shall be determined by the Social Security Administration. The old-age, survivors and disability insurance rate shall be that sales tax rate which is necessary to raise the same amount of revenue that would have been raised by imposing a 12.4 percent tax on the Social Security wage base (including self-employment income)as determined in accordance with chapter 21 of the Internal Revenue Code most recently in effect prior to the enactment of this Act. The rate shall be determined using actuarially sound methodology and announced at least 6 months prior to the beginning of the Calendar year for which it applies.

`(e) HOSPITAL INSURANCE RATE- The hospital insurance rate shall be determined by the Social Security Administration. The hospital insurance rate shall be that sales tax rate which is necessary to raise the same amount of revenue that would have been raised by imposing a 2.9 percent tax on the Medicare wage base (including self-employment income) as determined in accordance with chapter 21 of the Internal Revenue Code most recently in effect prior to the enactment of this Act. The rate shall be determined using actuarially sound methodology and announced at least 6 months prior to the beginning of the calendar year for which it applies.

`(f) ASSISTANCE- The Secretary shall provide such technical assistance as the Social Security Administration shall require to determine the old-age, survivors and disability insurance rate and the hospital insurance rate.