The Current Tax System Is Biased

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Many believe that the current tax system is biased. People exclusively have this feeling when being taxed based on their income. It is believed to be discriminating that the harder a person works and the higher their income, the more that person should be taxed. To fix this, the government has proposed a fair tax system in which they adjust the taxes so everyone pays an equal amount of taxes no matter the person’s income or economic status. People, especially business owners and wealthy individuals, feel this law should especially apply to them. If the fair tax law applies to them, they would not have to pay the amount of taxes based on their income, but they would pay their taxes based on the amount that the government calculates to be…show more content…
“Studies conclude that with the [fair tax] our economic growth in the first year will be about 10 percent. Capital spending will increase by 70 percent in the first year leading to more jobs and increased productivity” (fairtax.org). It is obvious that with the implementation of the fair tax law, the economy will receive incredible improvement. “The [fair tax] repeals all taxes on income and taxes personal consumption of new goods and services…. Under the [fair tax] you will be taxed 23 percent of what you spend. Money saved, invested, gifted or willed to heirs is not taxed” (fairtax.org) This will allow people to save large sums of money for further investment into the economy causing inflation. Many loopholes exist that allow people to avoid paying taxes. These loop holes include Tax Havens, Shell Companies, Life Insurance Borrowing and Real Estate Borrowing. But as with every problem there is a solution, and that solution is the idea of “Fair Tax”. This “idea” is currently a proposal in front of congress and thus would have to be passed to have any effect. If passed, Fair Tax would help eliminate many of the tax loopholes as well as help reduce unemployment within America. This proposal to congress looks to provide justice to all current and future tax payers. The Fair Tax looks to replace our “current federal income tax system [that] is clearly broken” (Barnhill). A “consumption tax” is what our current tax system will be replaced with. This tax focuses on taxing
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