Saturday, November 06, 2004

National Sales tax?

There have been rumblings about instituting a national sales tax and getting rid of the IRS. Fox news describes a plan by Rep Linder (R) from Georgia. In this plan the income tax (and the IRS) would end and we would have a 23% sales tax (in addition to the 6% tax that many states have).

There are opponents to the plan, some of which complain that it would disproportionately tax the poor. Of course, they really mean that it would fairly tax everyone...but it sounds bad to complain about a fair tax, so they claim that equal taxes are a heavy burden on the poor. Supporters do say that they will exempt the poor from the tax to try an counter this 'problem.'

I found it interesting that one major opponent of the plan, Inez Tenebaum (from South Carolina) was just defeated by Republican Jim DeMint.

While I find it very unlikely that this plan will go through, it will be interesting to see how much play it gets. A change in the tax system is very likely over the next four years. Whether it is a sales tax, a flat tax, or some other system remains to be seen.