Critics of the current tax system allege that taxpayers can use strategies to avoid tax obligations, and that the current system favors certain taxpayers over others. One proposed alternative is a national sales tax. For this discussion, read the open letter to Congress in support of the Fair tax in the Required Resources for the module. Then, consider the consequences of converting the current United States income tax system to a national sales tax on sales of goods and services. Under the new system, certain necessities like food would be exempted from taxation, and low-income households would be granted tax refunds. Would such a tax system eliminate incentives to shift activities (a) from one period to the next, (b) from one type to another, and (c) from one pocket to another? Explain, citing your sources.
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