The used goods loophole is intended to give low income taxpayers a means of paying less tax. A broader tax base will bring down the average tax rate for the middle class. The elimination of business expense deductions will mean that current pre-tax travel expenses will become taxable in a consumption tax regime. Yet, a flat consumption tax may still be too regressive to be palatable.
At least two solutions are possible: a negative income tax for those who wish to file (it really would be voluntary); and a reduction in government (the less likely alternative). Others?