Matt Drudge is reporting that Speaker of the House Denny Hastert will push for replacing the current income tax system with a national sales tax or value-added tax. Drudge reports that this will be a centerpiece of the president's domestic agenda in a second term.

Hastert's new book comes out soon and apparently contains details on the tax plan. I've heard a little about a proposal called the FairTax plan in the past and I hope the plan they push for is something similar. The FairTax plan replaces the income tax with one based on a tax on goods and services. The supporters say that it is "a voluntary consumption tax". The more you buy the more you pay and the less you buy the less you pay.

An obvious problem with a sales tax is that it hits lower income people hard. The FairTax plan addresses this by making all spending up to the poverty level tax free. There are various ways to do this, but one I've heard of is a rebate to those living below the poverty level.

The greatest benefit would be the elimination of an enormous waste of time and resources - preparing and filing income taxes. Since founding my own business in 2000 I've become very aware of the cost this exacts on small business. I essentially have no choice but to hire an accountant to prepare my taxes. At the beginning of every year I collect all my bank statements and receipts and deliver them to my accountant to prepare my taxes. The whole process is a big waste of my time and his talent.

I'm sure some bookkeepers and accountants will be against such a system, but hopefully many of them will see this as an opportunity to do something more productive.