Bush considers income tax alternative - Idea for national sales levy comes up at informal session

By EDMUND L. ANDREWS
THE NEW YORK TIMES
Seattle Post-Intelligencer

8/12/04

WASHINGTON -- A debate is flaring anew over the idea, most recently addressed by President Bush at a campaign stop in Florida on Tuesday, that the United States ought to consider replacing income taxes with some sort of national sales tax.

"It's kind of an interesting idea that we ought to explore seriously," Bush said in response to a question during an "Ask President Bush" session in Niceville, Fla.

Though the president's remarks were informal, he made them at a time when some of his advisers, though by no means all, are urging that his speech at the Republican National Convention include a proposal for a vast overhaul of the federal tax system.

Bush's comments were followed yesterday by a conference call with reporters, arranged by the Bush-Cheney campaign, in which the chairman of the tax-writing House Ways and Means Committee, Rep. Bill Thomas, R-Calif., said that he favored looking at "well-thought-out alternate tax structures" and that the committee planned to do so.

"We have one of the more regressive tax structures in the world today that basically is a 19th-century concept," Thomas said, adding, "We should get that revenue from people in the least destructive way possible."

Sen. John Kerry, the Democratic presidential nominee, responded to the president's remarks by immediately accusing him of contemplating a step that would add to tax burdens on the middle class.

"The last thing we need is a national sales tax that would impose a whole new tax on this country," Kerry said. "Were the Bush proposal to be adopted, many Americans would be paying more than 20 percent in national sales taxes on top of state and local sales taxes."

Nor was Kerry the only opponent.

At least one Bush adviser said there was a schism over the idea within the president's camp.

An idea that has surfaced from time to time, a national sales tax, or value-added tax similar to those in most European countries, would be a radical departure in the tax code.

Its opponents argue that it would punish the poor and the middle class, who typically spend a larger share of their income than the wealthy on consumption.

Proponents argue that it would be simpler and fairer than the traditional income tax because it would not provide the opportunities for loopholes and sophisticated tax-reduction schemes that tend to favor wealthy taxpayers.

At his appearance Tuesday, Bush stopped well short of proposing anything specific.

But White House officials were careful not to rule out the idea, noting that he had long been in favor of fundamental tax changes.