The required tax rate in a national retail sales tax

This paper examines the required tax rate in a national retail sales tax (N RST). I show that recent proposals, such as one to replace virtually all fe deral revenues with a 23 percent tax-inclusive NRST, are based on assumptio ns that real government spending would decline by $480 billion per year and that there would be no tax avoidance, evasion, or political erosion of the tax base in an NRST Correcting for these assumptions indicates that the re quired tax-inclusive rate would be over 50 percent anti the required tax-ex clusive rate would be over 100 percent.