How difficult would it be to implement a consumption tax?
In theory, a national sales tax would be relatively easy to put in place since retailers are accustomed to collecting sales taxes. A value-added tax would require a new tax collection structure. However, retailers hate the idea of a national sales tax or value-added tax, and claim that instituting either one would cripple the economy. The National Retail Federation says the high cost of goods would have a profound psychological effect, prompting consumers to stop spending on anything except necessities for a long period of time, which would put companies out of business and workers out of jobs. Even if there would be long-term economic benefits, they say the transition cost is too high. The federal government also would be horning in on territory traditionally reserved for state and local governments. The combined state and local tax rate in the United States is 8.587 percent, according to Vertex Inc. If higher tax rates slow spending, state and local revenues would suffer. A compromis
