I do not dispute the fact that much of the taxation is hidden. But do not believe replacing the income tax with sales taxes which will reach 40% when state and local taxes are added is a good solution to that problem.
Thing is the NRST isn are not just replacing "income tax" with sales taxes, to claim so is just down right wrong and it is no wonder you continue to believe what you insist must happen.
HR25 replaces 95% of all taxes collected by the federal government with an NRST. That includes those collected from businesses as well as individuals in the form of income and SS/Medicare taxes.
The NRST does away with all IRS reporting of income, withholding and estimated tax requirements on business, all costs associated with tax planning, sheltering of income from the IRS, the costs that busnesses incur in implementing plans to remove there earnings from federal tax jurisdiction, the costs and losses inherent in non-productive and low productive utilizations of capital for tax avoidence reasons, all the cost associated with dealing with the IRS administrative bureucracy, their audits, fending off legal actions, paying fines and penalties as well as court costs involved in such actions. The padding that businesses that reserve when the uncertainty of the actual tax due is uncertain to assure the bill is paid, All the myiad of incremental costs and losses that are born throughout all levels of business feeding into the final products at the retail level above and beyond the basic business accounting that would otherwise be normal to the conduct of a well run business.
Furthermore not only are the above business taxes and and associated cost factors removed with the repeal of the current federal tax system, no NRST is levied on any business use purchase. Thus the potential for significant reduction in the cummulative costs that go into the final retail product are indeed much more than just the amount of "corportate income taxes" collected by government that you apparently want to believe.
Finally with ringing out the cost factors above from the costing of products, and implementation of lower prices, additional gains in are to be had from the increased demand for products that arise with higher productivity more efficiently priced goods and services, the Laffer curve of demand side economics coming into play with economic expansion.
The protential for decline in shelf prices of product and supplies to business under the NRST is significantly more than just adding up the revenue take of govenment under the current system.
This will mean that the total tax burden will be over 45% in some localities.
The that is what it is and more today, if one counts the imposed losses due to the current tax system as a government imposed tax. The total tax burden under the NRST, since revenue neutrality is the target, will not be more than the burden today, and the full systemic burden of the NRST will actually be lower by the gains of economic productivity and improved cost efficiencies realizable under a single stage retail only tax.
These savings are wildly overstated and will not amount to as much as claimed since state income taxes will still be in effect, local income taxes will still be in effect and thus, require the same degree of administrative oversight. There will be a need for a bureaucracy to handle the rebates some have mentioned. There will be a need for enforcement of the law and tracking of the "not taxed purchases" allowed. Why wouldn't everyone just incorporate themselves, form a business and avoid the sales tax?
Laffer is an advocate of SUPPLY side economics.
The total TAX burden is nowhere close to 45% that figure can only be reached by including the costs of regulation which will be unaffected by a tax law change. And even then it is a stretch.
I have been discussing only income taxes because of the claims about the income tax being an element of the cost structure of products. Since I do not dispute the contention that the other taxes ARE part of that structure and do believe that wrt them prices could be lowered by shifting to a sales tax I have ignored them.