"You are ignoring the fact that your paycheck will not be reduced 25%-40% by state and federal income tax withheld. So you will have more money to spend and some of it will go to pay the sales tax."
State taxes aside, they will not be abolished, in fact they will have to rise as during slow economic or depressed business cycles finds less people buying things, the states will have to raise their tax rates to make up the differences in lost federal allocations for things etc..
Point I wanted to make and thought perhaps I did at least partially, was that those that fall below a certain level of income, will have to sign on to a federal controlled program to monitor their income intake, and in so doing will put in place a system that can later be expanded as required to bring more into the "fold of control", to encompass more people. For instance, if this new taxing device was found to be inadequate due to the actual amount of taxes collected per sales. Then the federal government would be forced to either decrease the exempt status of those that formally qualified for exemption from paying the sales tax, or further restrict those that currently qualify.
In so doing it would place a further burden on those, AGAIN,
that are retired and on fixed incomes.
And please don't believe for a minute that corporations will lower the price on large ticket items such as cars, because they are no longer federally taxed. That is just ridiculous. They will simply reep the extra bucks. It always works that way. So then some of you are going to say, well hells frigen bells......why doesn't the Federal Government force them to lower the price of their cars by the amount saved per car, due to the new system. So now you will suggest the USA further control our free enterprise system.
"they will have to rise as during slow economic or depressed business cycles finds less people buying things"
How do you come up with that? LOL! When people get more in their pay check. They spend more. That is a fact. You think Joe Blow is going to say hey I have $400 more in my pay check. I am not going to spend one extra cent. LOL!
Not unless they want to lose business to competitors who do lower their prices.
Sorry that I can't agree with you. Our views on the mechanics of economics are different. You could be right, but I don't agree with your assessment.
"And please don't believe for a minute that corporations will lower the price on large ticket items such as cars, because they are no longer federally taxed. That is just ridiculous. They will simply reep the extra bucks. It always works that way."
How about you and I start a company that does sell that large ticket item for the lower costs? You up for taking advantage of that readily available market?
Its called Free Market. When there are less regulation then there is more competion. Which is better for the cunsumer, jobs, and the economy. Case in point the long distance industry. Look how cheap long distance calls are now that the regulation was removed.