Fair Tax for Americans

Essay by maxd518University, Bachelor'sA+, September 2008

download word file, 5 pages 3.0

Fair Tax � PAGE �2�

Fair Tax for Americans

Russell DeSalvo

COMM105

Instructor: Geraldine Smith

January 10, 2008

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Fair Tax for Americans

Our tax system today is one reason American citizens are finding it so hard to get ahead. The Fair Tax system would help all groups of Americans from rich to poor and make yearly household income non-essential at the end of the year when the time comes to calculate income tax. The current income tax system punishes families that try to live the American dream. If history has taught this country anything, progress can only be achieved by changing the standards in which we lead our lives. We need to improve our countries standard of living and our competitiveness in foreign trade markets.

The Fair Tax plan would do away with federal, corporate, personal, Social Security, Medicare, estate and gift tax, and would basically eliminate the need for the IRS.

In this plan the federal government would receive about 23 to 26% of sales tax collected on all new goods and services purchased across the country. With the tax rate being at 23 to 26%, the average cost of goods sold could be reduced to account for the increase in taxes. The increased tax rate would not exactly be that large because businesses today are already paying 22% to the government in hidden taxes. On average, most people pay about 15% in payroll taxes, plus any state taxes that may be required in some states. That combined with the payroll taxes that the employer must match will exceed the proposed flat tax rate. Employers today are constantly faced with raising prices of goods and services in trying to offset the taxes that burden them. In a recent study it has been noted that retailers across the...