The FairTax Essay example - 1386 Words

People do not enjoy talking about taxes because they are too political, confusing, and depressing. It is no secret that the American tax code is a mess and something many economists describe as too broken to fix. Despite this, politicians have never stopped from trying to â€Å"fix† the code, yet they have had very little success. The U.S. Government’s tax code currently comprises â€Å"more than 67,000 pages of complexities† (Boortz, Linder, Woodall 14). The Americans for Fair Taxation (AFFT) was founded in 1995 with one goal: create the simplest and best tax reform plan that would work in the modern market and economy. The AFFT’s best solution was a bill which they promptly called the FairTax. What is the FairTax? Many people have not heard†¦show more content†¦Both coauthors explain â€Å"the myth of corporate taxes† with two statements: â€Å"When it comes down to it, no corporation or business really pays taxes,† and therefore, â€Å"the burden of it all falls on us [the taxpayers]† (32). They continue their explanation with another claim: â€Å"The economic education of Americans is so woefully inadequate that many of us actually think we pay less as individuals when the taxes are transferred to businesses and corporations† (31). To illustrate their point, the authors created a fictional corporation with simple guidelines. Although not their actual example, the following is similar: Qwerty Inc., a manufacturer of computer keyboards, has 200 employees and 100 shareholders. At the end of the year, Qwerty Inc. sold 1000 keyboards at $100 dollars each; therefore, the yearly income was $100,000. After labor, cost, taxes, and other charges, Qwerty’s profit is $2000 for the year. If the government adds a 10% corporate tax increase, Qwerty now owes an additional $200 in taxes. According to Boortz and Linder’s logic, Qwerty has several possibilities to balance the budget from the tax i ncrease: the shareholders could see their dividends decrease, the price on the keyboards could be raised, some employees could be fired to save on cost, or employee benefits could decrease to cover the cost of the tax increase. This simple example demonstrates the current tax code’s consequences on the taxpayers (citizens and consumers) and introduces â€Å"the embeddedShow MoreRelatedEssay about Fair Tax: Avoidance of Taxes1696 Words   |  7 Pagespresident of Let Voters Decide - the 501(c)(3) non-partisan organization advocating for reform - the â€Å"upshot would be ‘a better, broader tax base,’ while the taxes paid would depend on the consumer choices that people make,† (Mannies, 2011). In The FairTax Book, the designers of the â€Å"Fair Tax† concept assert that the poor would benefit from the proposal because their income taxes would be omitted (Moody, 2011). However, this ignores the fact that if this were to be only state law and not federal, MissouriansRead MoreBenefits of the FairTax Act1893 Words   |  8 PagesThe FairTax Act Many debates have been waged over the decades on what will be taxed, on who shall be taxed and how taxes are collected. Since the 16th Amendment was ratified in 1913, the debate has intensified, centering on how high to make the income tax rate. Most Americans were not concerned since the Amendment was sold to them as something that would only affect corporations and the rich. With ever increasing fervor these corporations created lobbyists to convince Congress to exempt themRead MoreThe Fair Tax Essay example1034 Words   |  5 PagesTaxes are unavoidable because government is needed and government operates on tax revenues. The FairTax is a tax-inclusive progressive national retail sales tax that replaces every other federal tax in America. The new national sales tax would be 23%. Although there have been some questions as to whether the sales tax rate is 23% or 30% and they stem from the meaning of tax-inclusive and tax exclusive. The sales tax in Florida is an example of an e xclusive tax because it works of a preset base. IfRead MoreThe Ethics Of The Fasb1166 Words   |  5 Pagesbecause I have learned what the function of FASB is. Also, I was always curious of the differences in SEC, FASB, and PCAOB. From now on, I definitely realized the differences in SEC, FASB, and PCAOB. Class#11 Two speakers from PwC presented what FairTax Act is and how it would impact the U.S. macroeconomic landscape. Jade Walle is an assurance partner at PwC. With his 18 years of experience in PwC’s Assurance Global Capital Markets practices in Tulsa, London, and Houston, Mr. Walle brings boundlessRead MoreOpposition to the Fair Tax1755 Words   |  8 PagesThe FairTax Summary of Opinion – Oppose FairTax 1. Will transfer tax burden from upper class to middle class 2. Will negatively impact housing market and charities 3. Will create huge underground economy and will lead to higher rates on consumption than predicted 4. Will not abolish IRS, but rather require increased government monitoring to ensure tax compliance 5. Not enough evidence of practicality and beneficial results of FairTax to justify risks Pretty much everyone would agree thatRead MoreAlternatives to the Us Tax System2212 Words   |  9 PagesFoundation estimates that $338 billion of time, energy, money, and other resources, are spent annually completing tax returns.[2] Three main proposals, the Flat Tax, the VAT Tax, and the FairTax, are being hailed on the Hill today as the solution to our current onerous tax system. While all have benefits and draw backs, the FairTax is the best alternative to the U.S. Tax System in that it is the only tax that reduces the tax burden on Americans by taxing the underground economy, simplifies the tax system,Read MoreShannyn Griffin. Professor Jones. English 1102, Section1903 Words   |  8 PagesShannyn Griffin Professor Jones English 1102, Section 22 29 April 2017 Replacing the Current Income Tax Structure with the FairTax Plan It is the general agreement of tax payers everywhere that the current tax system is way too complicated. You either need to have a certified public accountant help you do them or a specialized tax program to walk you through it. Not only that, but the costs associated with having someone prepare your taxes or buying the specialized computer program needed toRead MoreNo Taxation without Representation Essay1851 Words   |  8 Pagesrate, with no deductions, and no loopholes! By eliminating loopholes, the tax base and tax revenue would increase substantially. Comparison: FairTax The FairTax is a transparent federal sales tax based on consumption in which an individual receives the full amount of wages owed but are taxed during the purchase of a commodity. The idea behind the FairTax is that the more money you have, the more you will spend. The purchase of used goods like used cars, homes, and appliances are not taxed. AlsoRead MoreThe United States Should Replace Income Tax1448 Words   |  6 Pagesnational sales tax system like FairTax, the way it works would change. Although, the idea of workers earning more seems great, I however feel this may cause some concern with how much more workers would be spending as a result of their higher earnings. From my own experiences when you have more money, you would like to believe your spending wouldn’t go up, however that is easier said than done. So as you may assume the effect on income would suggest that the FairTax plan could cause consumption toRead MoreEssay on Taxes1185 Words   |  5 Pagesworked h ard for their money and it’s not fair for it to be taken away at sometimes almost 35 percent of everything they earn. In reality, a national sales tax would hurt the majority of Americans. An already existing American movement, called the FairTax Movement, believes in eliminating federal income taxes and replacing it with a nationwide 23 percent sales tax. On one hand it encourages people to work harder, since before there may not have been a desire to work longer and harder when that extra