The Myth of the Replacement Tax
Llewellyn H. Rockwell, Jr.
That is why so many of the people and groups who want to scrap the income tax seek what they see as a politically viable solution. They want to replace the income tax with some other form of tax that would supposedly be more painless to pay. The favorite candidate here is the innocuously named national sales tax. We picture ourselves paying an extra few pennies on what we buy at the checkout counter and never again having to worry about income taxes.
In fact, the national sales tax would have to be 20 percent at the retail level in order to match the revenue generated by the income tax. If your computer cost $2000, you would pay an extra $400 to the government for the privilege of owning one. Sales would plummet in the official market, and a huge black market would emerge overnight.
The government response would be to initiate a vast crackdown on tax evaders, which means that no businessman in America could conduct a single sale without thorough reports to the revenue agents. As in Europe, they would have to crack skulls but because not everyone can be policed, enforcement would be even more politically corrupt than it is now.
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