I believe the pronoun is actually ambiguous and unneccesary. For example take out the modifier and view the sentence;

"A national sales tax it raises consumer prices..."

The modifier being "imposed at each stage of the supply chain from poduction to cash register,"

The pronoun has no antecedent. Not real sure how you would rewrite it though.

Don't you think the sentence you mentioned is the case of RUN ON SENTENCE. both the clauses in the sentence are independent and a conjunction is needed to join both.

4 correct forms could be:

A national sales tax imposed at each stage of the supply chain from production to cash register, AND it raises consumer prices, sometimes substantially.

A national sales tax imposed at each stage of the supply chain from production to cash register RAISES consumer prices, sometimes substantially

AS a national sales tax imposed at each stage of the supply chain from production to cash register, it raises consumer prices, sometimes substantially

A national sales tax imposed at each stage of the supply chain from production to cash register; it raises consumer prices, sometimes substantially

See the details and reply.....[/b]

I agree with FightwithGMAT it seems to be a run on sentence

the sentence does not contain 2 independent clauses though...the first clause has no working verb. the first clause does not contain a relative noun or subordinate indicator or any of that stuff, but without a verb, cannot be considered an independent clause. I think the only possible sentence that fightthegmat presented that would keep the meaning the same and be grammatically correct is the third sentence. The first and 4th depend on the first clause being independent, and the 2nd changes the meaning. I am still confused tho, as to whether the orignal is correct.