 The effective tax rate for any household would be variable due to the fixed monthly tax rebate that are used to rebate taxes paid on purchases up to the poverty level . The tax would be levied on all U.S. retail sales for personal consumption on new goods and services . Critics argue that the sales tax rate defined in the legislation would not be revenue neutral ( that is , it would collect less for the government than the current tax system ) , and thus would increase the budget deficit , unless government spending were equally reduced . 
