Encouraging Economic Growth with the Fair Tax Act

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The recent global economic recession, the slow recovery, and the looming threat of a “double dip” recession have left most Americans bewildered. The issues are complex. The way ahead is unclear and fraught with danger. No one in seems to be quite sure what to do. Politics bicker over ideological talking points while nine percent of their constituents can’t find a job. The price of food, housing, and healthcare rise but wages remain stagnant. The housing market continues to flounder while interest rates hover near zero. While the debate about over the nation’s debt rages across Capitol Hill, our leaders seem unable to address the problem in a meaningful way. Most of them, however will agree that we do have a problem. The President’s 2010…show more content…
This inflates the price of their products. These “embedded taxes” are passed on to the companies that purchase these products in the course of their own business. This effect is cumulative and happens at every stage of the supply chain, until the product reaches the consumer. In the end, the consumer pays the tax burden of every company that had a hand in the production and distribution of that product. It is estimated that these embedded taxes account for 22% of the price of products and services (Boortz and Lender 53). Under the fair tax, no product would be taxed more than once. When the consumer buys the product, the consumer pays the tax, and then the seller remits that tax to the federal government.

The Fair Tax would have many other benifts for U.S. companies. Because The Fair Tax would be paid by the consumer at the time of purchase, a business wouldn’t pay taxes on the products and services that it purchases in the course of producing its own goods and services. The Fair Tax would reduce the operational costs to U.S. businesses, thus freeing capital for business growth and job creation. Many would balk at the idea of relieving corporations of their “fair share” of the tax burden, but the truth is that no company pays taxes anyway. They only collect taxes from their customers and send them to Uncle Sam. The taxes levied on businesses are paid either by consumers in the form of higher prices, by employees in the form of reduced wages,

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