gains, alternative minimum, Social Security, Medicare, and self-employment taxes with a federal retail sales tax to be levied once at the point of purchase on all new goods and services. According to proposed policy, every household of the United States is also eligible to receive a sales tax rebate each month. This rebate is equal to the product of (1) the sales tax rate of 23% and (2) the family consumption allowance divided by twelve. One of controversial aspects of the FairTax reform is the ability to be revenue-neutral, which means whether it would generate the same amount of overall federal tax revenues. Supporters of the FairTax claim the 23% rate is revenue-neutral while opponents disagree. Another common criticism of the FairTax is that it is regressive. That is, lower level income households bear a larger than equitable portion of the tax burden because most of their income is spent on essential daily need consumption items. Simultaneously, the proponents of the reform argue that the FairTax can be progressive due to exemptions or rebates. This particular paper aims to analyze both sides of the debate and provide necessary empirical evidence based on the previous literature research regarding the controversial nature of the FairTax.
In The Wealth of Nations, Adam Smith, the father of modern economics, laid out certain criteria forejudging tax structures and tax policies. Specifically, he felt that equity, explicitness, simplicity of compliance, and economy of administration should be the cornerstones of any tax system. The current federal tax system is criticized as being too complicated and unfair (Slemrod, 58). Efforts to simplify the current tax system, e.g., Tax Reform Act of 1986, are often viewed as ineffectual in creating a fairer or simpler system (Hite and Roberts, 121). For example, the President’s Advisory Panel on Federal Tax Reform (2005) points out that “our current tax code is a complicated mess. Instead of clarity, we have ...
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(Fairtax (fairtax.Org) Research Paper Example | Topics and Well Written Essays - 5000 Words)
“Fairtax (fairtax.Org) Research Paper Example | Topics and Well Written Essays - 5000 Words”, n.d. https://studentshare.net/miscellaneous/393381-fairtax-fairtaxorg.
This is as a result of taxation on the interest that is earned, capital gains and the returns to the shareholders. The regressive payroll tax burden makes people who earn wage in the society and those who own businesses to struggle. (Legislative Branch, 2011, p20190) The essay aims at discussing main points regarding the implementation of fair tax in the United States.
There has been a great debate since its presentation as it has equally good & worse aspects regarding the economy. The revenue collection may become less or the consumption may grow more. FairTax The term “FairTax” has been in a vast debate since its arrival, as it equally contains some relaxations & some controversies for the masses.
The agency was founded in 1862 by the late President Lincoln who was operating under the US Department of Treasury Act. The agent is mainly involved in the entire process of collecting both the employment taxes and also the individual income taxes. It is also in charge of handling of the gifts, cooperates, estate taxes and finally excise taxes.
Trends show the nature and the characteristics of the attribute keeping timeline in mind. Trends are always backed by Statistics and data. That is one reason why statistics plays an important role in everyday lives because it gives a direction and an understanding of a particular element while trying to gauge it.
One flat tax rate along with a rebate tied to the poverty line would replace the progressive system of taxation that businesses and individuals alike have to pay into. There are compelling arguments for and against the NST. The most compelling side is the side against the NST.
(Legislative Branch, 2011, p20190) The essay aims at discussing main points regarding the implementation of fair tax in the United States.
NSBA was the first small business organization to give a pass to fair tax to apply to all
On this basis, different types of taxations are imposed depending on the target source. For instance, income taxes to individuals and corporate, gift taxes and social security taxes. On the other hand, the remittance of tax income on fair tax