The worst thing about sales taxes in general is that they're regressive, meaning that the burden falls most heavily on those who can least afford to pay. Everyone buys milk, television sets and tickets to see their families. Imposing an equal tax on everything hits the poor the hardest. Sure, a national tax would simplify matters for companies that currently face a dizzying array of taxing authorities. But it'd be least fair to citizens who already are struggling to make ends meet by slapping a new tax on them. Ditto for older folks, who consume far more than they earn.
Fed chief Alan Greenspan has voiced limited support for a national sales tax, with the important caveat that such a system would work well if built from scratch. Good luck. Taxing is nearly a divine right of local governments, who've got roads to pave and schools to run, but, in most cases, no incomes to tax. (Yes, they get property taxes, but everyone benefits from the services local government provides.)
Last point: Does anyone really believe a national sales tax will lead to simplification? When the special interests are done with this one — who's exempt, which products get what treatment, how to pay off local governments, etc. — it'll be anything but simple. Let's by all means reform the tax code. But let's not start by adding a new, regressive, tax.
This weekend our Business Block has much more on how government involvment affects YOUR investments. Tune in Saturday 10am — noon ET.
Adam Lashinsky (email@example.com) is a senior writer for Fortune Magazine and a regular FOX News contributor.