With the national retail sales tax, our international competitiveness will be greatly enhanced. The national retail sales tax is only levied on sales in the U.S. Our exports will pay no U.S. tax nor include U.S. taxes in their prices. Imports into our country that are sold at the retail level will be taxed in the same manner as U.S. retail products.
5. Ensures that the members of the underground economy pay their share. Using IRS estimates, the underground economy has grown at a rate of almost 8 percent per year since 1965 and is the fastest-growing segment of our economy. The IRS estimates that $216 billion in taxes went uncollected in 1996, but many analysts believe that estimate is too conservative.
The underground economy encompasses not only illegal sources of income, such as drug dealing, gambling and prostitution, but also the average, ordinary citizen who accepts a lower price for cash payments and doesn’t report the income; the businessman who keeps two sets of books and pockets a portion of the sales or takes improper deductions; or the self-employed person who charges personal expenses through the business.
Will there be people who try to evade the national retail sales tax? Yes. There are always going to be people who refuse to pay any tax. However, it is much more difficult to avoid the national retail sales tax than an income tax.
6. Eliminates the taxes on work, investment and savings. Most legislators understand that taxing something will produce less of it. By eliminating the income tax which penalizes work, investment and savings, we will get more work, investment and savings.
There will also be what some economists call the “sponge effect.” The U.S. is the world’s largest market and has the best infrastructure of any country on Earth. When the income tax is replaced with the national retail sales tax, it will become the world’s largest tax haven and a “sponge” for capital from around the world. According to Martin Armstrong of the Princeton Economic Institute, replacing the income tax with a national retail sales tax will create an inflow of foreign capital into this country like we have never seen.
Continued...
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