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I have a question. If we go to a comsumption tax -- is that the same thing as a national sales tax? As a business owner, would I be responsible to collect and remit it when it is billed, even when we have accounts that run 60 days out? How will this work? Businesses are already drowning in paperwork.

That being said, almost anything is better than the present system.

"Businesses are already drowning in paperwork."

Precisely, but if you are already collecting sales tax, the only change is the % of tax. Taxman, ancient geezer or Bigun can give you more details of the specifics but I believe that you will remit as before and the state forwards the federal portion up the line. In the meantime, you get the feds out of your personal life and your accountant can either be fired or at least given a huge pay cut because the math is much simpler. Sales multiplied by the tax rate equals tax due. Job done.

I don't know for sure, but isn't there already some sort of lag time for reporting and paying? If not, one could be built in or if it really represents a problem for individual retailers, they can ask for a downpayment equal to the amount of the tax. How do you manage now with those who delay payment for 60 or 90 days? I know that this might be an additional burden for some, but in this case I believe in the greater good of the country. We must get the IRS out of our lives.

A National Retail Sales Tax is a form of consumption tax. See http://www.nysscpa.org/cpajournal/old/15410229.htm for a fairly good discussion of consumption taxes.

As to business sales tax collection, taxes will be remitted to the tax collection agency when realized. When you, as a business, actually collect the tax, you will be responsible for remitting it to the tax collection agency.

Both NRST bills (the Tauzin NRST and the Linder Fair Tax) call for states to collect the NRST for the federal government.

Re: paperwork. Your paperwork burden will decrease, both as an individual and as a business owner. Today, in the evil progressive income tax system, you are forced to file individual and business income tax returns, and collect and remit state sales taxes.

In the fairer, simpler NRST world, you will not have to file a personal or a business income tax return, and will only have to collect the state and the federal retail sales tax. A simple change to your accounting system will accommodate the NRST.

The Tax Foundation several years ago estimated that moving to a NRST would reduce the business tax compliance burden by 95%!

And of course, the personal tax compliane burden would be eliminated in its entirety!

And, you will get paid a percentage of your gross tax collections for collecting and remitting the NRST so that it does not become a unfunded federal mandate.

Check out http://www.salestax.org , http://www.votr.org , http://www.fairtax.org and http://www.cats.org .

I'm not sure which proposal they are specifically looking at. If it is a national sales tax, then yes businesses would have to collect the tax, much the same way as they collect the state sales taxes now.

I agree they are drowning in paperwork but there wouldn't be any other way to collect it. Certainly couldn't rely on an honor type code so it would have to be collected at the point of sale. There would be some elimination of paperwork on the business side as you wouldn't have to deal with withholding although the FICA part would still be there.

I prefer just a flat tax but like you said, ANYTHING is better than what we have now.