[Always Right]

From the Sale Tax Bill:


`SEC. 703. GOVERNMENT PURCHASES.

`(a) Government Purchases-

`(1) PURCHASES BY THE FEDERAL GOVERNMENT- Purchases by the Federal Government of taxable property and services shall be subject to the tax imposed by section 101.

`(2) PURCHASE BY STATE GOVERNMENTS AND THEIR POLITICAL SUBDIVISIONS- Purchases by State governments and their political subdivisions of taxable property and services shall be subject to the tax imposed by section 101.

.....
The government is viewed as the end consumer, so items they pay for including services (employees) are subject to sales tax.

[ancient_geezer]

The government is viewed as the end consumer, so items they pay for including services (employees) are subject to sales tax.

Yep.

We tax government today under the federal income/payroll tax system, and would under the Flat Tax.

To not do so under the NRST, would provide a very large windfall to government on which it would use to increase its spending and size relative to the private sector. A condition that government has shown it is more than able, willing and infact determined to do.

 

Relative Shares of Economy
pre-1930	post WWII (1947)	TODAY (2004)

 

A fairly comprehensive discussion of the issues involved in the NRST levy on government consumption (as an issue raised by the JCT) can be found in this PDF:

Impact On State And Local Governments And Tax-Exempt Organizations Of Replacing The Federal Income Tax, JSC-4-96, April 30, 1996 pages  57 thru 61(pdf pages 61-65)

 

To get rid of the NRST provisions taxing government, then reduce the current tax revenues by repealing taxes on government wages, and the governments budget by the same amount. Your issue will be solved, other problems would crop up in place of it, but that problem will be gone.