Overbuilding of new homes has ended rather abruptly due to the recession and the popping of the housing bubble. There will no doubt be some new homes built in the next few years, but nothing like we saw leading up to the crash. I think that problem took care of itself. Yes, there are a lot of homes with no one living in them just now. If and when the nation gets back to work, people currently without a home of their own will start to buy.
However, if new homes cost tens of thousands more than existing homes, no one would build, and we'd eventually see a lack of housing, which would lead to an increase in prices due to supply and demand. If a sales tax is to cover real estate (I think they do that in Canada), it would have to apply to both new and existing. Same with cars. It is double taxation to charge sales taxes on used cars, but if only new cars were taxes, there would be a huge incentive to buy used, and the car manufacturers would take a big hit.
There are lots of unintended consequences with any major change in tax laws.
What about services? Should they be subject to a tax as well? Currently, Taxifornia only charges sales taxes on goods, not services, and not on groceries.
If the national sales tax is to raise enough revenues to supplant the income tax, it will have to be pretty high, and/or cover everything.
