 The plan 's supporters state that a consumption tax would increase savings and investment , ease tax compliance and increase economic growth , increase incentives for international business to locate in the US and increase US competitiveness in international trade . The plan is intended to increase cost transparency for funding the federal government . Supporters believe it would increase civil liberties , benefit the environment and effectively tax illegal activity and undocumented immigrants . Opponents contend that a consumption tax of this size would be extremely difficult to collect , and would lead to pervasive tax evasion . They also argue that the proposed sales tax rate would raise less revenue than the current tax system , leading to an increased budget deficit . Other concerns include the proposed repeal of the Sixteenth Amendment , removal of tax deduction incentives , transition effects on after @-@ tax savings , incentives on credit use and the loss of tax advantages to state and local bonds . 
