1) Much greater economic competitiveness, since essentially foreign goods become effectively 25% more expensive compared to domestically produced goods (by elimionating the wage taxation effects on cost of domestic production.

2) Eliminate the incentive to hire foreign illegal workers, because there is no tax aqdvantage without payroll taxes (probably need to eliminate minimum wage with this as well for it to be fully effective.)

3) Eliminates the ability of those with financial means to avoid taxation via tax shelters, so in many ways this is less regressive than our “progressive” tax system that has lots of ways to avoid income taxes and much less regressive than payroll taxes.

4) Eliminates disincentives to investment in economy-growing new businesses and new technologies.

5) Won’t raise effective prices on domestic goods since the consumptiion tax is offset by real income increase – or conversely iof wages drop prices on domestically produced goods will drop with it.

6) Can’t be challenged by WTO since WTO policies and rules do not prohibit taxing domestic and imported goods equally nor do WTO policies and rules require countries to have income or payroll taxes.

In the healthcare industry, while financial matters are most apparent to the administrators, much of the informal; power structure is held by individual doctors. Often, a new system cabn be put in place, but the doctors will not necessarily use it unless they deem it to be saving them time – their most precious commodity. But a doctor faced with scribbling a signature on a piece of paper, or calling in an order, has littrle time incentive to log into a system, find the right patient record, and electronically enter or sign an order. While some hospitals have and continue to overcome these kinds of obstacles to adoption, many have not. Any the “stick” of medicare cuts serves as greater incentive for provider to refruse to accept medicare patients than it does to change adoption. A better approach would be to find carrots to incentivize individual physician usage rather than drive away the shrinking numbers of providers who serve those least capable of finding other providers.

One point you are also missing is that the EMR stimulus money has essentially halted EMR adoption. Any momentum we had before the $20 billion in EMR stimulus money has hit a brick wall. Doctors are waiting for HHS/ONC/CMS to define how they’ll get the money before they’re implementing an EMR. We actually still don’t know exactly what will be required for a physician’s office to get the money. Meaningful Use and Certified EHR are still being defined. At the earliest, none of the $20 billion will be spend until at least Spring of 2011.

It’s also worth noting that there’s a distinct possibility that the ARRA EMR stimulus incentives will encourage adoption of the large but mostly unusable EMR software. If this occurs, then expect more widespread EMR implementation failure and an increasing hatred towards EMR software. If this happens, then not only will it not stimulate EMR adoption, but will actually slow down adoption.

Luckily, I think most doctors will ignore the stimulus money and we’ll be back to where we were before it was announced. Granted, after a 3 year delay while doctors figure this out.