[tptacek]

He did address the gross receipts tax. There's an immense difference between a sales tax and a gross receipts tax: sales taxes happen at final sale, and gross receipts taxes apply to every transaction.

The gross receipt tax distorts the economy: it rewards firms that integrate every step of their production rather than focusing on their comparative advantage. The railroad that owns its own steel mill is tax-advantaged over the one that buys steel. That policy is inefficient: the economy should reward the most competitive steel mill, rather than insuring that the largest consumers of steel are more or less required to operate their own crappy mills.

Here's a more immediate example: imagine a tax policy that essentially fined Dropbox for not owning its own chip fab, and forced it to compete with huge companies like Apple that did.

Wal-Mart versus Apple is a bad example, because the two companies are in radically different lines of business. Instead, imagine a tax policy that fined Whole Foods, which sources the goods it sells from a variety of different vendors, while rewarding Safeway. And, of course, the point Rayiner was making was that turnover taxes penalize all of direct-to-consumer-retail; it doesn't just pick Target instead of Wal-Mart, but rather penalizes companies that rely on logistics and distribution at all.