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Sales Tax
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.
| Flat Tax | Sales Tax |
| Savings Plan | Clinton Plan |
T A X B Y T E S S P E C I A L S E C T I O N
M O N E Y: T A X G U I D E + F O R T U N E: T A X T I P S
T A X R E F O R M + I R S U N D E R A T T A C K + T A X P A Y E R W O E S
O N L I N E T A X L I N K S + T A X Y O U R K N O W L E D G E
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