Replacing the Current Tax Code With A National Sales Tax Will Reboot the American Economy

As Rezamee mentioned in the last round, I omitted to reply to his point that no nation had ever imposed a national sales tax. That is largely true although several nations such as Iceland, Norway, and South Africa attempted to implement a national retail sales tax. No nation currently maintains a national sales tax today. However, many European countries levy a Value Added Tax, which is similar to what I am proposing (http://www.taxpolicycenter.org...). It also is interesting to note that several states impose sales taxes (i.e., Tennessee). According to the original intent of the Founding Fathers, the states were supposed to be laboratories of experiment for ideas that could be employed at the national level. Consequently, it would be reasonable to look at states like Tennessee in the debate on the national sales tax. In Counter 1, Round 3, Rezamee speaks of income inequality again. In developing a tax code, our goal should not be minimizing the income inequality gap. Our goal must be to ensure that every taxpayer keeps more of their earnings. While I do not exactly know the economic circumstances of Rezamee"s family, I do come from a lower middle class family myself. Four hundred dollars was a lot of money to us. It meant the difference between having enough money to save more toward larger purchases, provide extra health care for the family, or treat our family to a brief vacation. As a working American now, it takes me a whole week of hard work to earn four hundred dollars. Four hundred dollars for me now would help ease some of my expenses such as new clothes for work or school and putting gas in my car (I ride my bike to work for six months each year). In Counter 2, Round 3, Rezamee asks for my source for the CBO reporting that the government spends a trillion in federal subsidies. Here it is (http://www.urban.org...). This report examines the subsidies from 2012. Since then, government subsidies have only increased (http://www.heritage.org...). Finally, if Congress cuts defense spending, its members are not upholding their basic responsibilities under the Constitution. Domestic spending must be the first area that is addressed in making budgetary cuts. In Counter 3, Round 3, Rezamee accuses me of fabricating a fake National Sales Tax. I did not fabricate a national sales tax to fit the context of the debate. I specifically stated national sales tax. In his counter to my position, Rezamee mistakenly thought that the national sales tax would be limited solely to retailers that sold directly to the consumer. However, if a national sales tax is considered properly, it will create the cascading phenomenon (http://www.taxpolicycenter.org...). Cascading means that inputs will be taxed as well as outputs. Consequently, business to business transactions will be taxed under a properly designed national sales tax. The reason for implementing a national sales tax instead of a value added tax (VAT) is to achieve exactly this result. Rezamee also challenges me to provide a way to replace lost tax revenue without significantly hurting the government"s budget or the economy. After much thought, I believe that I have come up with a solution. As I said at the top of my post, the Founding Father intended the states to be laboratories of experiment for policies that could be employed at the national level. Tennessee levies a 6% tax on interest and dividends in addition to its sales tax (http://www.usatoday.com...). Employing a similar system at the national level would help diminish the income inequality gap that Rezamee has pointed out as well as make up some of the government"s lost revenue. I acknowledge the importance of this issue, but I do not think that it should be used to stop the implementation of a national sales tax. I am running out of time so I must politely request that Rezamee grant me until the next round to respond to Counter 4 in Round Three. Thank you for another interesting round and I look forward to another interesting round.