...in return for elimination of the income tax ...

This would make economists very happy. Taxing consumption makes a lot more sense than taxing income, since it encourages saving over consumption.

Two comments on that:
There is a big generational fairness issue to be addressed. Older folks have already paid the income tax on the money they have saved, then they'd pay the replacement tax again as they spend it. The change could be phased in over time to minimize this problem.

Interestingly, it's not unlike the tax system in Monaco. No income tax, high consumption taxes. It works fine, and there is no income tax paperwork, a benefit that it's hard to over emphasize. There is also a corporate income tax, a flat 25% of profits for international firms. Zero for local firms like restaurants and bakeries.

Jim

Berkshire Hathaway FAQ

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