HOUSE TO MULL RETAIL SALES TAX MEASURE

CAROL EMERT

WASHINGTON (FNS) -- Retailers' worst nightmare, a federal retail sales tax, has reared its head on Capitol Hill.

House Ways and Means Committee chairman, Rep. Bill Archer, R-Texas, said he expects to introduce legislation for a broad-based "tax on the consumption of goods and services" this fall. Last week, he planned to start holding extensive hearings on tax reform, with a goal to enact a bill into law next year.

Archer's tax would be in the form of a retail sales tax or a value-added tax. The VAT would be levied at each stage of the manufacturing process and may include a surcharge at retail, according to Ari Fleischer, Archer's spokesman.

The Archer bill would eliminate the individual income tax, but the congressman has not yet decided how he will address corporate income taxes, Fleischer reported.

Reps. Dan Schaefer, R-Colo., and Billy Tauzin, R-La., introduced a similar bill this month. Their proposal aims to replace the current income tax on individuals and businesses with a 15% retail sales tax on all goods and services. Rather than taxing earnings, "the government only gets its cut when the consumer chooses to consume," a statement from Schaefer's office said.