Thursday, March 31, 2005

National Sales Tax Huh?

I see George Will is pushing the National Sales Tax idea again. Thing is, I've always had this little problem with it.

See, it's always on "personal consumption". Which to my mind is what the US Census reports as "Retail sales and Food and Services sales". Now if you pull up the annual benchmark report (here - warning, big pdf file) you'll find the Total for 2004 was just over US$3.9 Trillion - that is, US$3.9 million million dollars. Which seems like a lot till you go look at what the US Government spent in 2004 - Just over US$2.3 Trillion (US$2.3 million million) dollars.

Now, I don't know the ins and outs and such, but it appears to me that this means the US Government would have to apply a federal sales tax of about 60% to be able to replace all the other taxes - income, corporate, estate, and all the rest - to avoid a deficit. And this is before it starts making exemptions or paybacks or other such things so as to make the thing "fair" - so the poor can pay for basic necessities and that sort of thing.

I won't pay 60% sales taxes so Walmart can avoid paying several billion dollars of corporate income tax.