Andy, the ease of avoiding a consumption tax -- especially a per-jurisdiction one -- is one of the top mainstream criticisms of it, and is one of the reasons it would not be nearly as bad as an income tax if done right. It's no coincidence that sales tax rates vary far less across jurisdictions than income tax rates do. It's also no coincidence that jurisdictions rarely if ever try to raise sales tax rates above about 10%.
Tom, I would advise an LP candidate to talk about such a dramatic shift away from taxing savings/investment only in the context of 1) ironclad constitutional protections against income tax backsliding, 2) dramatic reductions in the amount of revenue raised and privacy invaded, and 3) radical decentralism in implementation. Your concerns over transition issues don't worry me nearly as much; the transition to full libertopia would inevitably be much more wrenching.
Reducing taxes versus rearranging them is a false dichotomy. The whole idea here is that it's easier to reduce taxes if the tax system isn't organized precisely the way the nanny staters intentionally set it up, and we only try to turn the knobs the nanny staters built for us. FDR is even ON RECORD as saying that the FICA payroll tax was designed to make it politically impossible to eliminate the Social Security entitlement. Six decades after his death, the cold dead hand of FDR mutes even Ron Paul from talking about eliminating the payroll tax, and instead he only talks about eliminating the income tax and to a network TV audience says of Social Security:
"I'm the one that has saved it. I say this constantly--don't turn anybody out on the streets. People we have conditioned--yes, technically we shouldn't have them, and it'd be nice to get rid of them, but I would say take care of the people that are dependent on us."
I don't know about you, Tom, but I'm at war with the nanny state, and I'm more than willing to fight dirty -- to fire into the nanny state's flanks from behind trees and rocks, rather than march in bright columns straight up the road and be mowed down while beating our drums and holding high our black banner. I don't buy the argument that the way to start winning against the nanny state is to die (politically) for our cause of anarchism. Instead, to paraphrase Patton, the way to start winning is to make the nanny staters die (politically) for THEIR cause of nanny statism. If a few of our candidates want to test their aim from behind some trees and rocks, I say pat them on the back and let them ride toward the sounds of the guns.
(What violent metaphors. Good thing I took the Pledge!)
