Among the tax proposals Bob Dole may consider is a point-of-sale consumption tax, supported by House Ways and Means Committee Chairman Bill Archer (R-TX). Rep. Archer thinks a national sales tax would lead to the abolition of the IRS; but critics counter that it is nothing more than a Value Added Tax (VAT) in disguise.

The problem with VAT -- which adds a tax at every stage of production, paid for by the end-consumer -- is that it is hidden from the consumer in the price of retail goods, requires a huge bureaucracy to administer and is therefore easy for politicians to raise.

Critics point out that everywhere a national sales tax has been instituted, it has eventually been turned into a VAT.

• In 1967, 19 members of the Organization for Economic Cooperation and Development (OECD), from Austria to the United Kingdom, had some form of a wholesale or retail tax.

• Citizens balked at the high bill -- which would have to be a minimum of 15 percent in the United States -- and by 1995 all 19 countries, plus four others, had VATs.

• None of those countries dumped the income tax, as sales tax advocates hope the U.S. would do.

NCPA economist Bruce Bartlett notes that without the VAT it would have been harder for Europe's social welfare states to create such extensive programs.

Back in the 1960s, Europe's taxes were about the same share of gross domestic product as America's. Now Europeans pay much more.

• Tax revenues in 1994 were 46.5 percent of GDP in Germany, 48.9 percent for France, and 55.3 percent for Norway, according to the OECD.

• That compares with 31.5 percent for the U.S. and 32.9 percent for Australia (another VAT-free nation).

• In fact, voters is Canada and Japan turned against right-leaning parties with sales tax or VAT proposals.

Bartlett and other economists think a flat rate income tax is a better way to address the double and triple taxation on savings that finance investment and growth.

Source: Editorial, "VAT in Drag," Wall Street Journal, July 19, 1996.