Originally Posted by Dark Messiah

They have more money to start with, but only as long as they don't actually buy things. In a system without a sales tax but with an income tax, they're not punished for buying things; in fact, being able to write a great number of expenditures off their taxes encourages spending.

In the system where you have no income tax, but a sales tax, however, they're losing money with each expenditure- each purchase becomes a greater financial burden.

They can lose just as much under the first system as the second, but within the system, in the first they're still inclined towards buying things, whereas the second makes them inclined to try and hold onto their money to preserve those artificial savings.