Scott,
The biggest issue I have with your idea is the classification of things for the different tax brackets. Is soda a luxury item because I don't really need it? Is an STi a luxury item because it's not an efficient commuter vehicle? Why not just a flat sales tax period? More expensive things will pull in more total tax.
Think there would also need to be a way for the merchant to divy up the collected sales tax to the different localities in the most efficient way possible. Wouldn't be a big deal for brick-n-motor stores but online retailers would need to cut a check to every individual city (worst case)
Totaly agree on the Social Security part.
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Dan - '05 Black WRX STi.
My Mods
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