Read the bill so you'll have a better grasp of what you're discussing.
"Read the bill so you'll have a better grasp of what you're discussing."
It's not a matter of 'grasping' what's in the bill. I'm not disputing your account of the contents or the intent of this legislation. My issue is that regardless of the content, that content must be translated into rules, regulations and definitions by an army of bureaucrats. Congress leaves these items to be defined by the bureaucrats that administer the law. No one can predict the outcome of this process. And, this process will occur.
My second concern is 'how do we transition to this system?' Suppose this law is passed effective on 31 December of 2006. I realize that the law has provisions for granting tax credits to businesses that hold inventory on that date. If I buy something on 1 January, an item will cost me 25% more than on 31 December. Will there be a buying spree on the 31st? (I can see the sale ads now.) But, I'll have the same amount of money in my checking account.
Sure, business costs will go down, but that will happen over time and no one can predict the extent of this. How will businesses deal with this risk in their pricing strategies? Will the prices go down to match the increase in sales taxes? What will the effect of this uncertainty have on production and sales? Will businesses take a 'wait and see' attitude? What will the effect be?
Will some businesses speed up inventory purchases to get the tax credit? Or, will they delay purchases? What effects will this have on employment?
Meanwhile, prices will have gone up by the amount of the sales tax but the amount in my check book remains the same. Sure, I'll get some tax credits and my next paycheck will be increased by having no withold but that won't happen for a week or so.
I don't believe any one can accurately predict the effects these factors will have on the economy.