Pay and bonuses received in a combat zone is paid without any income tax. The soldier is then allowed to spend it free of sales tax at a PX/BX/Commissary. Under your proposal, he would not be able to purchase items free of sales tax. So that small benefit is no longer available to him.
You missed the point. You are free only of individual income tax. Any made make in the PX/BX/Commissary still includes the cummulative cost of federal taxation embedded in the price of a goods and service, no matter where you buy them. That amounts of 20-25% of current product prices.
As far a combat zones, the NRST is collected only within the United States. There is no provision in the bill to tax products sold and consumed overseas. As far as paying duty/NRST on bringing something back from a combat zone or foreign base the same rules apply with a $400 NRST exemption on any items carried back.
If you are concerned about making a provision for a federal exception or credit for purchases out of combat pay specifically for purchases within the US I suggest you contact Congressman Linder's office and bring the issue up.
Personally, as a Veteran, I figure having to report my and my families expenditures out of combat pay to the government to get an extra credit under the circumstances in not something I find very attractive.
Both as a citizen and a veteran. I certainly don't find the current income/payroll tax system worth keeping compared to of being taxed on expenditures out of combat pay under an NRST.
As far as visibility goes, I get a pay stub with all my taxes on it. No secrets there, I even have it on a spread sheet. If Bush really had any balls, he would get rid of mandatory withholding. I believe he could do that with an executive order, so what are we waiting for?