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I do not agree that it has to end up being so horribly regressive.
There are ways around that.
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I hate to sound patronizing as I respect you, but do you honestly think that any sales tax can be anything but regressive?
The idea that everyone pays the same % on things they buy is the most classic example of a regressive tax. Rich consume less as a % of their assets/income then do the poor. Hence they are taxed a lower % of their assets/income.
Even if you give the poor money back somehow, then the rich are still doing better than whatever your cutoff point is for handing out the free money. And I doubt the money you give most of them would be enough to close the gap anyway.
Now, don't get me wrong, I'd be incredibly happy if they did this, but it would be the biggest swindle America's middle and lower class have ever seen. Also, there is no way that 23% tax rate is sustainable for a plan like this, I'd estimate it would need to be at least 30-40% but that is beside the point.
Just so we are all on the same page. Regressive tax:
http://en.wikipedia.org/wiki/Regressive_tax
I think that does a good job of summing it up, but I thought this was all in intro econ classes?