If you listen carefully, they always tell you where they are headed. Yesterday, in remarks that were barely covered by the U.S. media, George W. Bush floated the idea of a national sales tax in place of the income tax and let it slip that a major overhaul of the tax code will be high on his list if he is elected in November.
There has been a lunatic fringe movement pushing this idea for several years, but most respectable policy analysts see the movement for what it is: the final step in the destruction of a fair and progressive tax system. "A sales tax is fair. You can control you own tax bill by controlling your spending," the proponents argue. And that's true, provided you don't have to spend every nickel you earn just to live.
We now stand at the final stage of an orchestrated campaign by conservatives to do away with a progressive tax system by replacing the income tax with a national sales tax or flat tax which would cut the taxes of corporations and the very rich and impose huge tax hikes on the vast majority of American families. They've already succeeded in nearly eliminating most taxes on investments and estate wealth, leaving only wage-earners to pay taxes. The national retail sales tax, which will be promoted as "simplification," is the crown jewel.
Reliable estimates by the Price Waterhouse Economic Policy Group estimate the tax rate would need to be at least 15%. Imagine if tomorrow the price of everything you buy were increased by 15% or more! How would that affect you? We can get an idea by considering how present state sales taxes affect people at different income levels: the bottom 20 percent, with an average income of $9,300, pay eight times more of their income in state sales and excise taxes than wealthiest 1 percent, who have an average income of $1.1 million.
Reuters: Bush Says National Sales Tax Worth Considering
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