DeMint’s National Sales Tax: Applied to Profits

Tax Analysts reports:

Sen. Jim DeMint, R-S.C., on October 5 said he hopes to energize the tax reform debate with a proposal to replace the federal income tax with an 8.5 percent national retail sales tax on individual purchases and business profits … DeMint plans to introduce the bill, a hybrid of a retail sales tax and a business transfer tax, during the week of October 17.

Sandwiched in-between this news is some obligatory blah, blah, blah about Katrina, which seems to be unrelated to this story. This is a hybrid tax given that both consumption and business profits will be taxed. But if the tax rate is only 8.5%, just imagine how large the deficit will become if we eliminate the Federal income tax.