Economist and Trump adviser Stephen Moore told Fox News’s The Big Idea that he thinks the country could benefit from getting rid of the federal income tax and replacing it with a national sales tax of about 17% instead.
Americans living in poverty or at low incomes would still not pay taxes under Moore’s plan because everyone would get a card that made the first $20,000 of their purchases tax free.
Giving and saving would be incentivized because they would not be taxed, and best of all it would make the IRS unnecessary along with anyone in government’s knowledge of how much money anyone makes and paying someone “under the table” for work.
Moore pointed out that the national income tax was not instituted until 1917, so the U.S. lived without that revenue for roughly 125 years.
One drawback I see to replacing income tax with sales tax is that larger underground markets would probably develop to buy and sell items without paying the taxes, so much of the IRS workforce would probably be diverted to detecting and breaking up this would-be illegal activity.
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