Pros And Cons Of Fair Tax Act
Fair Tax Act: Should You Support It or Not?
If you hear people discussing the Fair Tax Act but aren't yet familiar with it, you'll probably wonder what the fuss is all about. One side says that the act will solve a lot of the United States's taxation issues, while the other points out that it will bring on a whole new set of problems.
If you're wondering which side is right, you must first understand what the Fair Tax Act is all about. Basically, it will abolish almost all kinds of federal taxes (including income, estate, and capital gains taxes) and replace it with sales tax. If the act becomes approved, the federal government will earn taxes from retail goods, which will have a 23 percent sales tax. Imported goods, secondhand items, and materials bought by businesses to manufacture their products are exempted from this tax.
Of …show more content…
It lets people keep all of their income
People will no longer have to pay income tax, so they'll get to receive 100 percent of their income. This, as experts assume, will lead to higher consumer spending and help stabilize the economy even when certain federal taxes would be abolished.
List of Cons of the Fair Tax Act
1. It places the burden on the lower and middle classes
Rich people have the option of buying imported goods which, as mentioned above, won't be taxable. They can also opt to put most of their income in their investments instead of spending it on retail goods. Because of this, the economy will depend highly on the spending of those in the lower and middle classes, who usually have no choice but to spend on food, clothing, and other necessities.
2. It's unfair to seniors
Seniors don't earn an income, which means they won't really benefit from the “100 percent take-home wages” concept of the Fair Tax Act. They'll also have to suffer from paying more sales tax, when they had paid high income taxes when they were younger and thus have already done their part in contributing to the economy.
3. It won't affect state
If you hear people discussing the Fair Tax Act but aren't yet familiar with it, you'll probably wonder what the fuss is all about. One side says that the act will solve a lot of the United States's taxation issues, while the other points out that it will bring on a whole new set of problems.
If you're wondering which side is right, you must first understand what the Fair Tax Act is all about. Basically, it will abolish almost all kinds of federal taxes (including income, estate, and capital gains taxes) and replace it with sales tax. If the act becomes approved, the federal government will earn taxes from retail goods, which will have a 23 percent sales tax. Imported goods, secondhand items, and materials bought by businesses to manufacture their products are exempted from this tax.
Of …show more content…
It lets people keep all of their income
People will no longer have to pay income tax, so they'll get to receive 100 percent of their income. This, as experts assume, will lead to higher consumer spending and help stabilize the economy even when certain federal taxes would be abolished.
List of Cons of the Fair Tax Act
1. It places the burden on the lower and middle classes
Rich people have the option of buying imported goods which, as mentioned above, won't be taxable. They can also opt to put most of their income in their investments instead of spending it on retail goods. Because of this, the economy will depend highly on the spending of those in the lower and middle classes, who usually have no choice but to spend on food, clothing, and other necessities.
2. It's unfair to seniors
Seniors don't earn an income, which means they won't really benefit from the “100 percent take-home wages” concept of the Fair Tax Act. They'll also have to suffer from paying more sales tax, when they had paid high income taxes when they were younger and thus have already done their part in contributing to the economy.
3. It won't affect state