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A better plan is the FairTax — see www.fairtax.org

This calls for repeal of the federal income tax, closing down the IRS. Instead, we would have a national retail sales tax on services and new goods (not used goods). There would be no taxes deducted from payroll (including no Social Security tax and no Medicare tax). A system of “prebates” paid monthly would level the playing field for those with low incomes. Some 60,000 pages of IRS rules, regulations, instructions and forms would be trashed.
The national sales tax would be collected by the States, using their existing mechanisms.

The FairTax would result in unprecedented economic growth.

The Fair tax would not only eliminate the useless IRS, but it would target the underground economy that currently pays ZERO taxes.

As a matter of fact, people in Congress (and Rahm's brother, apparently) are cognizant of the fact that there is a growing underground economy where people don't pay income taxes.

Fair-taxers should get it into their heads that this is never going to happen. As easy as it sounds it is ridiculous to consider that the government will be ‘prebating’ a check to everybody in the country in order to allow for a VAT or point of sale tax. It is much more likely that a flatter and fairer tax with limited deductions would be easier and much more efficient too not only sell to the American people but to enact.

A good example of a fairer flatter tax would be close to what the Republicans are pushing for now, a voluntary two tier tax. 10% on all income up to $100,000 and a 25% tax on all income above $100,000. This coupled with generous personal deductions of around $12,500 per family member linked to inflating would allow a family of 4 who gross $100K pay 10% taxes on $50,000 after personal deductions.
This plus a massive overhaul; of government workforce, including the privatization, an outright elimination of large swaths of the federal government would solve many of the problems

The FairTax would result in unprecedented economic growth.
Yea, cuz there's nothing like a hefty 30% tax on all goods and services to spur economic growth.

And if a (gag!) prebate is such a good idea why not double it?