That would make things a whole lot more simple come April because taxpayers wouldn't need to file a return. The idea is to encourage savings and simplify tax filing.
But a national sales tax could have all sorts of unintended consequences. Sales tax tends to penalize lower and middle income families that spend a higher proportion of their income and might be perceived as "unfair," a political drawback.
There also is concern the sales tax could turn into a value-added tax, with various levels of taxation that are masked from the public.
The same family that earned $50,000 under this plan would pay $3,222 -- after factoring in a proposed family consumption refund that the sponsors propose. Without the refund, which is designed to lesson the burden on the less affluent, the same family's tax burden would amount to $5,632, the Tax Foundation says.
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