The Fair Tax: Is the End of Income Tax On Its Way?
The Fair Tax movement is something that is gaining steam across the nation, as more and more individuals learn of the new possibilities that might soon exist in lieu of paying income tax. The FairTax movement is making its way across the nation in a way that one might expect a politician to. It seeks to get people to understand that a federal income tax is not the only way to pay.
What is the FairTax movement?
The proposal is one that seeks to get rid of the current federal income tax and payroll tax system and replace it with a fairer, more practical system. It wonâ€™t serve to eliminate all taxes, though. Instead of the federal income tax and associated payroll taxes, Americans will pay a tax based upon what they purchase. In effect, this is a proposed national sales tax. It is a tax movement that includes much more than that, though. This movement will attempt to affect changes to the constitution, and in particular, the 16th Amendment.
This movement will eliminate federal income taxes of all forms, including both corporate and personal taxes. Among the things that will not be taxed under the new law include gifts, estate earnings, investment or capital gains, Social Security income, and self-employment taxes. The FairTax movement takes into account that taxes must be levied in order to run the nation, so it proposes a simple tax on all sales. The sales tax would be significantly higher than our current sales tax, as it would likely be somewhere in the 25-30% range.
If a new tax law were to be put into place, it would be carried out by the entities that currently handle sales tax. This would help to eliminate any logistical problems that might exist otherwise. With that in mind, it is one of the simplest implementations possible.
What are proponents saying?
The Fair Tax movement has gained a lot of steam and in that, it has picked up some staunch supporters. Those who support the new tax act have some interesting arguments in favor of the proposal. The majority of that information can be found at the official website of the FairTax movement .
In their staunch support of the new taxation, supporters like to bring up the inefficiency of the old system. According to statistics, the total amount of money wasted by businesses and individuals was $200 billion last year. With this new tax, that waste could be saved and the productivity of the American economy would be on the rise. This means that everyone wins under the new system, where they might have failed under the old system.
In addition to improving the overall efficiency of the tax system, this new tax would take some of the burden off of those who are currently carrying the economy. Under the current income tax code, the people who are paying the bulk of the national tax revenue are middle class citizens who are trying to cut down on their spending. The new tax code would shift the tax burden to those people who are actually doing the spending. Supporters of the Fair Tax movement feel that this is a much more fair system.
What are the detractors saying?
As with most political issues, there is another side of the coin and a large group of people who oppose the FairTax movement. These people are busy shooting holes in the theory of the supporters of the movement, and have found some support in their arguments against. According to detractors, the entire premise behind the fairness of the proposal is inaccurate. Instead of providing a fairer option to the American people, it actually makes things more difficult.
Those in opposition of the act claim that it is an attempt by the government to once again pander to the upper crust of American society. While the current tax system mandates exactly how much money people have to pay in taxes, this system would allow those rich people to control their taxation. They claim that there are holes in the new sales tax that would enable people to get around the sales tax by using some simple loop holes. Under this line of thinking, the FairTax movement wouldnâ€™t be fair at all.
According to detractors, the problem is that wealthy people do not have to spend a large portion of their income. They can put that money in the bank and let it grow without taxation. This will all occur which the lower and middle class in America has to spend almost all of their income, which means that almost all of their income is taxed. Critics of the new movement claim that this is not fair and it is simply an attempt to limit how much of the wealthy peopleâ€™s money can be collected by the government.
The FairTax movement has its high points and it certainly has its inherent disadvantages. Though it provides a new, exciting option for Americans to consider, some argue that it will do more evil than it will good. It is far from a perfect system, even though many of the staunchest supporters claim that it will fix all of the ills of the current tax system. As this movement continues to pick up more steam and more supporters, the debate will continue to rage on, as individuals consider how a new tax system might affect them and affect the American people on the whole.