A White House report encouraging states to eliminate their income taxes has drawn criticism over the economic and political reality of how exactly states would fill the huge holes such a move would leave in their budgets.
The Council of Economic Advisers report this week found states could enact an average sales tax rate of 6.2% to 8% to fully replace revenue lost from ending their personal income tax, corporate income tax, and existing general sales tax. That new sales tax would apply to all personal consumption expenditures except groceries, rent, or goods already covered by an excise tax, like ...