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, CongressmanBill 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 theincome tax. That lead to more than a half dozen congressional panels holding hearings onthat subject. So there is no longer a question of whether the income tax system will bereplaced or not, the question now is, what should it be replaced with? Well, a nationalsales 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 willallow us to completely eliminate the income tax, possibly even repealing the 16thAmendment, an amendment that authorized the income tax and made it a part of thegovernment in the first place. However, the change would come at a cost greater thanseems 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
Butwhile this sounds like a good plan, the government will actually still lose the same amountof money. The government would absolutely have to do this because a greatamount of tax evasion would certainly take place. Some people that are lobbying for the national sales tax argue that by having thissales tax, we could eliminate the Internal Revenue Service completely. With all of the above said, there are two options besides the implementation of anational sales tax system. With the sales tax in place, many Americans would befacing a great increase in tax. Actually, if this is the case, everyperson that operates a business or sells anything outright, such as someone selling a car,would become a tax collector for the government. This is true because if there is an income tax system being enforced, the drugdealer isn’t going to report his income, but if there is some sort of a sales-tax system inplace, the drug dealer would still not be collecting a sales tax from his customers, so therewould be no sales tax from those people going to the government. Leave the system as it is with the income tax, or use a flat-taxsystem. Because the sales tax would be so high, the governmentwould almost have to make a select amount of products exempt from the sales tax, somany of the sales-tax proposals include something about a rebate. Under any type of sales-tax system, people would still need to file paperworkwith the government, only they would have to do it for totally different reasons than theydo under the income tax system. To generate enough revenue by taxing goods at the retail level only, a sales tax ofat least 20 percent would have to be put into place. nd that tax beyond the retailer to every single layer ofproduction as well. Instead of filling out a large amout or paper and wasting alarge amount of time on their tax forms, they would only have a small card or form to fillout and send in. Suddenly, consumers will be seeingthat everything they buy has been increased in price by that 20 percent. So in essence, a national sales tax will beundermined by a tax revolt immediately and quietly, which will therefore mean that thegovernment would respond with a value-added tax that no one wants.
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