REPLACING INCOME TAXES WITH AN UNDER 10% NATIONAL SALES TAX
Tax increase advocates argue we must increase taxes to reduce the deficit. The problem is that tax increases slow economic growth, resulting in diminished growth in the tax base while, at the same time, increasing the pressure for more government spending.
If Congress were to act responsibly (yes, an oxymoron), it would hold down the growth of spending, as was done in the late 1980s and late 1990s, and eliminate those government programs that do not meet a reasonable cost-benefit test. As has been shown before, such actions would quickly eliminate the deficit.
The good news is that the actual numbers show that it is possible to responsibly develop a program to eliminate the income tax and replace it with a relatively low-rate (less than 10 percent) sales tax. Not the 23 or 30% proposed by "Fair Tax" advocates, but under 10%. Here's how.
