Pros and Cons of the Fair Tax
Is the Fair Tax, Consumer Sales Tax the Answer to the Current Problems and Debates Concerning Federal Spending and Taxation?
Apparently the Fair Tax is a federal sales tax that ideally would replace the current federal income tax system. The idea is that you would be taxed based on what you spend, and not what your income is and what kind of tax breaks the government is trying to champion at that time. Many believe that this would not only be a fair tax for every American, but would also make it possible to tax those who are currently outside of the current system, such as illegal immigrants and drug dealers.1
Proponents of the Fair Tax
Current proponents of the fair tax say that this is a real and viable alternative, saying that this is a real tax that you can see at the register, instead of some theoretical tax code that takes years of study to understand. They also believe that it would help curb spending, and make the federal tax system more honest. The fair tax was developed by economists who believe that a federal sales tax could replace and even possibly exceed the government's current tax revenue. It is also believed that this plan would reduce the amount of money lost to earmarks and stimulus packages.2 It seems that the government may also save money because the tax system would be so much simpler. Imagine no more April 15th dash to the post office, although this may put your local tax preparer out of business.
Opponents to the Fair Tax
Opponents to the Fair Tax are worried that if this tax is implemented we will be stuck with both taxes. The reasoning behind this is because the Fair Tax can be implemented by the simple stroke of congresses' mighty pen. However for the current system to be removed there would have to be an amendment made to the constitution. Thus it is believed that the Fair Tax could be put into place, but then the federal income tax might be stuck in place indefinitely. It is also believed that the tax would start out at as much as 23% and when added to the state sales tax items would be taxed as much as 30% or more, making it even harder to buy the things one needs.3 One must also take into consideration that according to the USA Today April 1st edition, that 36.3% of tax filers did not pay U.S. income tax in 2008, not to mention those who evade the system entirely. What's in it for those that don't currently pay taxes, to want a system in which everyone who makes a purchase must add a little to the federal pot?
1, 2- The Consumption Tax That Does Make Sense
Friday, May 29, 2009
by: Ken Hoagland
3- Why the "Fair Tax "is Unfair
By Darrell L. Castle
Constitution Party Vice-Chairman
Published by John Savage
I am a 35 year old man with a 3 year old son. I live in Tucson Arizona and study mostly theology and philosophy. I am also an ordained minister of the Universal Life Church. I am enrolling in a freelance wri... View profile
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2 Comments
Post a CommentThe short answer is yes. The long answer is you will have more money in your pocket as the cost of goods and services would not increase AND you would receive a prebate check every month. Read the book for a more detailed explanation, it's well worth your time. Good luck.
Two comments:
1. We have far too many people employed by the federal government. These people are paid with taxes; private employees are paid with profits. On that basis, the Fair Tax is good.
2. I'm retired and no longer pay federal taxes. So, with the Fair Tax I will once again pay the equivalent of federal taxes? That part is bad.