[coloradan]

It matters because it isn't an apples to apples comparison. People's incomes will jump at the same instant prices rise, because at the moment the NRST takes effect, income taxes (e.g. withholding) vanishes. Of course purchases will drop with a sudden jump in prices, all else being equal.

[Always Right]

It matters because it isn't an apples to apples comparison. People's incomes will jump at the same instant prices rise, because at the moment the NRST takes effect, income taxes (e.g. withholding) vanishes.

Certainly most peoples incomes will go up to make up for the cost increases. The problem is, many sources of income do not have withholdings and will not go up. For example, millions of elderly on Social Security will not see their checks go up. People on tax-free pensions or tax-free investments will also not see any increase in income. These people will be in trouble under the sales tax.