You were pretty bad an the argument that work incentices would increase. The increase in the price of goods has the same impact on incentives as an income tax if the revenue streams are identical. There will be composition effects.
The idea that the states can do it and the IRS will be irrelevant is naive. States have their own problems administering sales taxes and the same complexity as the income tax. Have you followed the streamlined sales tax debate. Talk to a state tax person. The states would be crazy to get in this and become the bad guy. If I were a state tax person I would say to the feds "you do it and we will piggyback on you and you be damned and not us" You would end up with something like the IRS if only to keep the states in line and uniform. If the income tax and corporate tax go away, so will the state versions and you end up with a combined rate of 35% (for example) Can you imagine the temptation that is to merchants?
At least you recognized that the 23% rate is phoney!
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