I don't think we'd have two and the new one would encourage wealth creation while the present one discourages and penalizes the creation of wealth.
The bureaucracy would be much smaller and the monitoring method is already in place with most states' sales tax mechanisms.
The IRS would be transformed into a shell of what it is now and individual, corporate and partnership taxpayers would not have to full out paperwork anymore.
Since it is a consumer, instead of a producer, tax, the underground economy (approaching between $600 billion to %1 trillion a year, depending on who is estimating it) would be tapped into. Right now it escapes federal and state taxation, except things like excise taxes and sales taxes.
Here's an example" If a cocaine or ecstasy dealer makes $50,000 in one month, how much state and federal income tax does he pay on that? None.
If that dealer plops down the same $50,000 on a new Mercedes, he would pay an NST of $7,500. The tax burden would actual lighten up greatly for honest individuals, plus you would see capital investment like never before in history. Capital gains, dividends, interest on savings accounts and CDs, etc. would not be taxed.
As for the economy being supported by spendthrifts and massive debt, that is not a good thing, that is a false economy. I grant you, it has been encouraged by Washington politicos for years. They are just as guilty as the Americans who have fallen into that lifestyle trap. |
