The average sales tax in the USA is probably between 7-8%; In Europe this is on average 20%
I petition to overhaul the (sales) tax by:
- Increase the rates to 12-15%
- Charge Federal Internet Sales Tax
The incremental revenue can be used to:
- Lower the federal income tax rate and / or to
- Provide a flat rate income tax
Rationale:
Sales tax targets the consumption of goods - this typically is directly related to the way people consume their income. By simultaneously lowering the income tax, people will have more free income and can direct this income to purchase more goods which in return will yield higher taxes and create more jobs.
A federal sales tax (especially for internet purchases) should be established to avoid 'out of state' tax loopholes.