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? I mean...I wouldn't have to fill out any forms, and the IRS wouldn't have to cut checks, audit forms, etc. Wouldn't this eliminate a lot of paper work?

You have hit the crux of the issue. Retail Sales taxes have less associated overhead than any other tax proposal out their.

It eliminates the taxation on businesses throughout the chain of production, reducing costs across the board.

It encourages savings and investment over consumption, a very necessary factor if we are ever to privatize or get rid of the Social Security .

It assures every voter participates in the tax system, assuring everyone sees that cost that everygrowing government has upon us all.

It empowers the citizen and reduces the tools govenment has to use in manipulating the electorate with the social and economic engineering inherent in the income tax system.

"As a matter of fact, what the income tax does — and this is the debate that I think we always try to get into in order to let you and him fight, see — and the people of this country are led down a path where the actual control of their resources, which in the end is the control over their will, is handed off to the government."

. . .

"The government then manipulates that will in order to destroy the freedom of our electoral system through the income tax structure, and we call the resulting slavery a free system."

"In point of fact, it is not as the founders understood, and the only way to restore real freedom is to give people back control over the income that they earn so that they won‘t, at the voting booth and in other phony issues, be subject to that manipulation."

- KEYES TRANSCRIPT (01/28/02)

Direct Consumption Taxes, such as a National Sales Tax (NAT), might make a substantial contribution to Federal revenue, but it's highly unlikely that it could provide more than perhaps 50% of what's required.

One pratical limitation of direct consumption taxes is that they encourage widespread evasion via both informal and semi-formal back market arrangements – experience in Europe suggest that even in the case of "indirect" consumption taxes (such as VAT taxes) the break-even point is tax rates somewhere in the low or mid teens, beyond this point it rapidly becomes more difficult to collect such taxes, creating an culture of widespread tax evasion that in turn evokes increasingly intrusive tax collection methods.

It's also uncertain how well US political and economic culture will deal with the regressively of such taxes (on the average, the lower your income the greater percentage of your income is paid into direct consumption taxes). In Europe such taxes are tolerated in part because they coexist with expectations that a large portion of the revenue collected will be returned to lower and middle-income taxpayers via programs such as government funded medical care, while in the US country taxpayers would likely see a lower proportional return on their tax payments.

But the biggest problem is the rates that would be required to produce a revenue neutral result: if a NAT was sole source of current Federal revenue realistic estimates (accounting for such factors as funding a cut-over of SS to a "privatized" system for taxpayers under 50, servicing the projected Federal debt, and other factors that are often left out in such calculations by their proponents) are in the range of 17-21%, which would be collected in addition to state and local taxes.

Such a tax rate is clearly a non-starter, which is why we are starting to see accounts of more "realistic" plans like those in the WaPO article cited above.

Why isn’t a NAT or a VAT included in such plans as a revenue supplement?

As a taxpayer, do you expect that if the Federal government had an additional major method of taxation your other taxes would be lowered by an equal amount?

The ATP cited above is a very different kind of tax, it achieves its "low" rate by very broad application and being quite progressive (higher-income earners pay a higher proportion of their income in taxes. Also, though he doesn't stress the point, his sort of transaction tax makes it a lot more difficult for sophisticated taxpayers to evade taxation.

That's fine with me – I believe that there is a need in successful market-based economies for relatively high levels of "social investment", and on pragmatic grounds I’d prefer to have it funded from moderately progressive taxation.

But readers here need to be aware that the APT runs strongly counter to the current trend toward increasingly regressive taxation of earned income and reduced or eliminated taxation of unearned income, which most posters here appear to favor.

Direct Consumption Taxes, such as a National Sales Tax (NST) might make a substantial contribution to Federal Revenue, but it's highly unlikely that it could provide more than perhaps 50% of what's required.

One practical limitation of direct consumption taxes is that they encourage widespread evasion via both informal and semi-formal back market arrangements – experience in Europe suggests that even in the case of "indirect" consumption taxes (such as VAT taxes) the break-even point is tax rates somewhere in the low or mid teens, beyond this point it rapidly becomes more difficult to collect such taxes, creating an culture of widespread tax evasion that in turn evokes increasingly intrusive tax collection methods.

It's also uncertain how well US political and economic culture will deal with the regressively of such taxes (on the average, the lower your income the greater percentage of your income is paid into direct consumption taxes). In Europe such taxes are tolerated in part because they coexist with expectations that a large portion of the revenue collected will be returned to lower and middle-income taxpayers via programs such as government funded medical care, while in the US country such taxpayers would likely see a lower proportional return on their tax payments.

As several posters note above, it's possible to produce less regressive (and even progressive) consumption taxes by rebating (or just not collecting) some of such taxes otherwise due from low-income payers. On grounds of simplicity and fairness the best way to do so is probably to exempt a "market-basket" of non-discretionary items or to tax then at a lower rate – once you start adjusting taxation on the basis of income, you are back to the various difficulties of determining, reporting and verifying income that are one of the chief drivers of complexity in the current tax-code as it applies to individuals. The problem, though, is that such consumption is a significant portion of the taxable total, so you then have to increase rates to raise income – which squeezes middle income taxpayers (too "rich" to avoid payment, but "poor" enough that a lot of non-discretionary income is taxed) hardest.

This in turn brings us to the the major difficulty with such taxes: the rates that would be required to produce a revenue neutral result- if a NST was sole source of current Federal revenue realistic estimates (accounting for such factors as funding a cut-over of SS to a "privatized" system for taxpayers under 50, servicing the projected Federal debt, and other factors that are often left out in such calculations by their proponents) are of a NST in the range of 17-21%, which would be collected in addition to state and local taxes.

Such a tax rate is lilely a non-starter politically, which is why we are starting to see accounts of more "realistic" plans like those in the WaPO article cited above.

Why isn’t a NST or a VAT included in such plans as a revenue supplement?

As a taxpayer, do you expect that if the Federal government had an additional major method of taxation your other taxes would be lowered by an equal amount?

The ATP cited above, OTOH, achives its "low" rate by very broad application (it taxes almost every sort of economic activity) and being highly progressive (higher-income earners pay a higher proportion of their income in taxes.

(Also, though the author doesn't stress the point, his sort of transaction tax makes it a lot more difficult for sophisticated taxpayers to evade taxation.)

That's fine with me – I believe that there is a need in successful market-based economies for relatively high levels of "social investment", and on pragmantic grounds I’d prefer to have it funded from moderately progressive taxation – but readers here need to be aware that the APT runs strongly counter to the current trend toward increasingly regressive taxation of earned income and reduced or eliminated taxation of unearned income, which most posters here appear to favor.