This would be replacing ALL federal taxes on individuals. SS tax, employer contributions (which doubles the SS tax), medicare taxes, capital gains taxes, and ordinary income taxes. The number represents that actual average percentage of taxes paid based on income. If it seems high, it is because it IS high--already!
Don't forget, the plan has a prebate built in that pre-returns all taxes that would be paid on goods and services up to the poverty level, so people who spend that much or less would pay no net taxes, and we'd all have our 23% tax burden lowered by 23% or the poverty level. Also, the tax is only applied to new goods. Purchasing used goods would be exempt from the tax.
The best feature is that we stop building tax disproportionately into prices of domestic products, and start putting it into all products, regardless of source. That will rid us of an inherent bias against our own products in favor of foreign goods.
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