What do you think of the John Linder proposed national sales tax?

Question by bobby BOO: What do you think of the John Linder proposed national sales tax?
Here’s the bill:

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h25ih.txt.pdf

Here are a few points I got from reading the bill.

The IRS would be abolished as would income and payroll taxes. It would be replaced by a national sales tax on transactions. Every transaction would be reviewable for taxability. The gas tax would remain. The rate would be 23 percent. There would be a tax credit of the tax rate times the poverty line.

Employers would still have to report your income to the government.
You would have to fill out qualifying forms annually, or more often when your situation changes, to receive your tax credit. There would be strict deadlines or you lose your credit.
The federal govt, the states, and possibly even a third authority of blocks of states, would the have power to audit you. You may still need your accountant and lawyer for dispute resolutions.
Healthy garage sales would be taxable.

The tax would apply to consumption.
The tax would not apply to most investments.
The tax would apply to electricity, phone, and cable.
You would pay tax on your purchases, including food.
With the exemption being the poverty line, middle class people would pay the highest income-to-tax ratio.

LARGE businesses would be exempt from the tax when selling to related companies.
Insurance companies would receive a credit, but could charge YOU the credit amount and require you to file forms to the govt to get back the credit.
There are special rules for copyright and trademark holders.
Businesses would have to report and pay taxes monthly in most cases.

The 23 percent per-transaction rate would cover less than half of national income. This would lower revenue to 11.5 percent from about 17 percent. Additionally, the credit would cut into this more, with every family who meets the conditions recieving monthly checks from the government. The 23 percent rate is not nearly high enough.

Let me know if you read some of this and tell me what you think!

Best answer:

Answer by Shovel Ready
What would happen in the end is that the income tax would remain, and the nationwide sales tax or VAT would be added ON TOP OF THAT. Whoopie.

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