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  • Essay / Fair Tax - 1037

    Taxes are inevitable because government is necessary and government runs on tax revenue. The FairTax is a progressive national retail sales tax that replaces all other federal taxes in America. The new national sales tax would be 23%. Although some questions have been asked about whether the sales tax rate is 23% or 30%, they arise from the meaning of the terms "tax inclusive" and "tax exclusive." Florida sales tax is an example of an exclusive tax because it operates on a predefined basis. If a person buys something for $1 and pays $0.30 in tax, the sales tax is 30 percent because it is $0.30 per dollar. With tax included, the item would cost 1.30 because tax is included in the price. The 23% tax rate is calculated by dividing the tax paid by the total cost of the property or $1.30/$0.30 to obtain 23% of the tax cost. The FairTax rate is inclusive and therefore reflects the rate of 23%. The FairTax is a consumption tax that will replace the income tax and eliminate the need for the Internal Revenue Service or (IRS) for short. The FairTax would eliminate self-employment taxes, death taxes, capital gains taxes, corporate taxes and more and replace complex regulations with a simple, easy-to-collect sales tax. The tax would lead to GDP growth because without an income tax, people would have more money to spend and the increased spending would fuel economic growth. The FairTax bill also contains a provision that will provide a monthly “down payment” to waive the tax on basic necessities like food. There will be no more individual tax returns, only businesses will pay taxes to the government with tax money paid by consumers. Compliance costs for FairTax will be lower due to fewer collection points, resulting in fewer...... middle of paper ...... alternative minimum taxes. This tax will allow people to become more active in government because, thanks to this tax, they will not have to pay for it. The FairTax helps create jobs because it gives people more money to spend, increasing their consumption and creating jobs that are desperately needed today. Repealing these federal taxes will attract foreign investors to America to spend and help grow the economy. Although many Americans are currently receiving tax refunds, they are only receiving money they should have already had. The simple way to fund the government is much better than the complicated and confusing process of filing taxes. April 15 can be just another normal day for all of us, instead of one of the most stressful days of the year. As FairTax gains support, the United States moves closer to the day it says goodbye to April 15 for good..