ok, I don't see how the National Sales Tax would work out. It sounds to me like it would end up taking more money from the average person than anything. Here's how I'm looking at it.
If everything up to the poverty line is tax free -- then those who make just enough to get by should, theoretically, pay no taxes. Granted, the vast majority of people will make more than this and since the lowest income producing segments of the populace make the least amount anyways, they contributed the least amount to the tax fund.
However, there are those who live above the property line who would also, in theory, be able to get around this tax system. For instance, if you buy goods in a foreign nation, you would not pay the tax on it. If you try and compensate by increasing tariffs or applying a new tax to match out, you stifle and hit foreign industry in this country. It also works out poorly for industries that rely on foreign branches. For instance, if I run a clothing distributor that relies on russian manufacturing, tarrifs could kill me unless I raised my prices....which the consumer will have to pay on top of the new consumption tax. You could make an exception for american industry with foreign dependencies, but then that creates two problems, it heavily promotes outsourcing goods to foreign interests and takes industry out of country...making every industry look like IT does now and secondly, it provides a pretty large loophole for people to slip in tax-free foreign produced goods, which means the US will end up importing rather than exporting and consuming american. What this also means is that it favors those with the money to establish foreign plants and play the international market.
I know this has probably been researched by people more educated than me, so my first inclination is to say I missed something...but I can't quite figure out what.
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