[supercat]

I'll bite. What do you mean, double taxing of savings?

If someone saved money in a conventional savings account or Roth IRA, they've already paid income taxes on that money, in the expectation that they won't have to pay federal taxes on it again. Replacing the income tax with a sales tax would mean that people who buy things with borrowed money before the switch and repay the debt after would not pay any taxes, while those who save money before the switch and buy things after would get hit with both taxes.

[Lynne]

To avoid the double taxation of savings accounts, etc., they could probably come up with some kind of debit card system for existing accounts. You have a $100,000, then you get a debit card for x% of tax free spending. Sort of like the photocopy cards, or the telephone calling cards you buy.