It might be the most radical issue of the U.S. Senate race so far — a bill backed by Republican Jim DeMint that would scrap all federal taxes and the IRS and replace them with a 23 percent national sales tax.

DeMint’s Democratic opponent, Inez Tenenbaum, has made the sales tax a major issue in the campaign, saying it would devastate the middle class.

But to Thomas Wright, volunteer executive director of the grass-roots group pushing the idea, the sales tax would restore democracy as the Founding Fathers envisioned it.

“Our IRS system is the biggest surveillance organization the world has ever known,” he said.

Read the “Federalist Papers” and other government philosophers, he said, and you’ll see some Founding Fathers called the federal tax one of the “tools of tyrants used by despots.”

The federal income tax system “is exactly what they told our Founding Fathers not to do.”

Like a traveling salesman or a zealous disciple, Wright, of Florida, has crisscrossed South Carolina and 39 other states in the past year promoting and defending the national sales tax.

It sounds almost too radical to be serious.

But the sales tax proposal is gaining traction. And if DeMint wins the Senate seat, it would get another big boost.

Last session, House Resolution 25 won 54 co-sponsors in the 435-member House, including DeMint, a congressman from Greenville, last session. President Bush expressed interest but quickly backed away from the idea.

Wright’s group, Americans for Fair Taxation, didn’t invent the idea of replacing the income tax with a sales tax on goods and services. The concept has been around for decades.

“It’s not as loony an idea as it sounds,” said Frank Hefner, an economist at the College of Charleston who mentioned it in his graduate thesis 20 years ago.

Tenenbaum ripped into the idea at a news conference last month, ticking off the items that would be taxed at 23 percent — baby formula, rent, and the light bill, among other things.

“It’s going to cause serious pain,” she said.

U.S. Rep. John Spratt, D-S.C., ranking member of the House budget committee, joined in the criticism last week.

“This is a bad idea,” he said. “It will make the tax burden far heavier for lower- and middle- class Americans,” who must spend a greater proportion of their income than do wealthier people.

Lately, DeMint has tried to turn the debate around, talking instead about his plan to have a bipartisan commission examine all possible taxes and pick the best one.

But Wright and his group have seized the chance to get publicity for the national sales tax, which they call the “Fair Tax.”

Wright has shown up in South Carolina at least twice, once to crash a Tenenbaum event, and last week to hold a news conference about how the sales tax would help S.C. farmers.

Tenenbaum and other critics, Wright said, are “misrepresenting the plan, flat and simple.”

Americans for Fair Taxation evolved after a couple of accountants and lawyers said they were sick that their corporate clients got tax breaks while average people — who couldn’t manipulate the system — paid for everyone else.

A group of corporate leaders heard about the effort and raised $22 million for economic studies, eventually resulting in the current bill. Enron was among the group’s backers, though the embattled energy company no longer is involved.

The idea is this, Wright said: Because of the corporate income tax and all the other charges the government levies as goods and services are produced, every product purchased costs about 22 percent to 25 percent more than it should.

Get rid of all that and just charge a 23 percent sales tax, and the average person wouldn’t notice much of a difference, he said.

So the poor aren’t overwhelmed, everyone would automatically get a monthly sales tax rebate check based on the number of people in the household and the government’s poverty level. For a family of four, that would be $479 a month.

The sales tax would be an incentive to save or to invest — rather than spending — and would make U.S. goods competitive on the international market like never before, Wright said.

Some economists, such as Dan Mitchell of the Heritage Foundation, a conservative Washington think tank, say the national sales tax is an idea whose time has come.

“I’m actually a cheerleader for any low-rate tax reform plan that gets rid of double taxation,” he said, referring to the many bites of the apple federal taxes take out of earnings.

Donald Ratajczak, a professor emeritus at Georgia State University, also said the sales tax deserves consideration because the current tax code is so onerous.

Other economists see too many holes in the plan. Some aren’t convinced the rebate check would match what lower-income taxpayers pay in sales tax.

“I don’t think it’s a very good idea,” said Holley Ulbrich, an economist at Clemson University’s Strom Thurmond Institute of Government and Public Affairs.

She is backed by a study from the nonpartisan Institute on Taxation and Economic Policy —supported by the Streisand Foundation and the J.C. Penney Foundation, among others — which found 95 percent of South Carolinians would pay more in taxes under a national sales tax.

Critics of the sales tax also say it would hinder home ownership and other investments encouraged through tax incentives in the current code.

Throwing those out the window could create chaos.

Also, Ulbrich said, states and local governments already charge sales, income and property taxes — and they would not go away.

Hefner, the College of Charleston economist, added that to make the sales tax work, the federal government would have to promise never to levy another tax.

“My fear is you’d end up passing a 23 percent sales tax and then you’d have a bunch of other taxes, and that would be a terrible idea,” he said. “The devil is really in the details.”

Tenenbaum and Spratt also cite studies, including one from the Brookings Institution, a nonpartisan Washington think tank, saying 23 percent is too low to keep up with the cost of government services, and that a more realistic rate is 60.7 percent.

DeMint has said he co-sponsored the national sales tax bill and several other plans, including the flat tax, because he believes the federal tax code hurts business and must be fixed.

Tenenbaum says DeMint now is running away from the issue — which she says is unpopular in South Carolina — focusing instead on his other proposal, eliminating the IRS.

But Wright says he doesn’t understand why others don’t agree with him.

“When are people going to wake up and realize (the current system) is oppressive?”

Reach Talhelm at (803) 771-8339 or jtalhelm@thestate.com