Here's what I think. The ideal tax is a 10%, or lower, retail sales tax. No exemptions. Zero corporate tax, zero capital gains tax, zero death tax. The national sales tax would replace all other taxes. The only other federal government revenue would come from fees paid for specific services and land leases.
There are two reasons I like this idea; one philosophical and one practical. Philosophically, it's the closest thing possible to a voluntary tax. If you buy less stuff, you pay less in taxes. If you buy more, you pay more. Practically, it's extremely pro-growth. It eliminates the complexity of the current tax code, which means companies can divert the money the now spend on complying with the tax code to more productive uses. It eliminates corporate taxes, which makes running a business in the US much less expensive, which encourages businesses to stay in, or relocate to, the US. It eliminates payroll taxes, making it less expensive to hire people, which encourages businesses to hire more people. It eliminates capital gains taxes, encouraging people to invest and save more. Get the picture?
The problem is that the 16th Amendment gives Congress the power to tax income. If we passed a national income tax, Congress would inevitably add it to all the other taxes we already have, which would be disastrous; just ask a European. We would first need to repeal the 16th Amendment, which is very difficult to do.
Given that reality, I think the most practical thing to do is replace all current taxes with a 10%, or lower, personal income tax and a 10%, or lower, corporate tax. Eliminate all other taxes. Most of the pro-growth properties of the sales tax would remain.
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