National Sales Tax vs Income Tax1

The National Sales Tax vs. The Income Tax
Only days after the last elections for Congress in November of 1994, Congressman
Bill Archer declared his strong desire to “tear out the income tax by its roots.”After that,
Newt Gingrich and Bob Dole formed a commission to consider new alternatives to the
income tax.That lead to more than a half dozen congressional panels holding hearings on
that subject.So there is no longer a question of whether the income tax system will be
replaced or not, the question now is, what should it be replaced with?Well, a national
sales tax is an option that cannot be ignored, even though it may not be the best solution.
The case for a national sales tax begins with one greatly appealing line.It will
allow us to completely eliminate the income tax, possibly even repealing the 16th
Amendment, an amendment that authorized the income tax and made it a part of the
government in thefirst place.However, the change would come at a cost greater than
seems fair:we would give up the income tax for a sales tax system that is more
If the government sets out to collect a new tax at the register when something is
bought, it will then have to extend that tax beyond the retailer to every single layer of
production as well.The government would absolutely have to do this because a great
amount of tax evasion would certainly take place.Soon enough, the national sales tax
would become a very complex, multi-rate, value-added tax, or VAT.
To generate enough revenue by taxing goods at the retail level only, a sales tax of
at least 20 percent would have to be put into place.Suddenly, consumers will be seeing
that everything they buy has been increased in price by that 20 percent.However, the
people will not want to pay that high of a tax, so they will find ways to say that the
products they buy are tax-exempt goods, they will buy the goods on the bla…

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