What Are The Pros And Cons Of National Sales Tax

While most taxpayers agree that tax reform is necessary for our country the problem they encounter is the difficulty they experience when trying to understand all the political terms used when discussing tax reform. This paper is an attempt to help the taxpayers of our country to better understand the political terminology and gain knowledge about some of the proposals that have been explored.

The Fair Tax is not a tax break. It ensures revenue neutrality meaning that the FairTax will give the government the same amount of revenue as the income tax system while spurring economic growth. The critics of the FairTax say that the rate should be at least 10% higher in order for the government to have revenue neutrality. With the substantially higher sales tax rate people may evade this tax and just buy the necessities. A vast majority of poor people are all in debt because they spend even when they don’t have money, when people have more money they save anyway. This fact leads critics to believe that since the poor and middle class spend the most they will be bear the burden of the substantially higher sales tax. FairTax answers this criticism by saying that the government will fully reimburse taxes for those whose income is below poverty level. The “prebate” discussed earlier and the elimination of FICA taxes

Throughout the entire existence of any form of government, there has always been taxes. Most of the time (if not all), people hate taxes. With this being said, the United States has adopted a progressive tax since its very existence. We believe that if our nation is placed under a flat tax system, our economy will operate more effectively. If we incorporate a flat tax system we will be able to ensure fairness among all citizens, eliminate tax loopholes, and allow opportunities for business expansion. With this being said, we will be examining the strengths and weaknesses about the flat tax system and how it has been used into practice.

People do not enjoy talking about taxes because they are too political, confusing, and depressing. It is no secret that the American tax code is a mess and something many economists describe as too broken to fix. Despite this, politicians have never stopped from trying to “fix” the code, yet they have had very little success. The U.S. Government’s tax code currently comprises “more than 67,000 pages of complexities” (Boortz, Linder, & Woodall 14). The Americans for Fair Taxation (AFFT) was founded in 1995 with one goal: create the simplest and best tax reform plan that would work in the modern market and economy. The AFFT’s best solution was a bill which they promptly called the FairTax.

From the point of shoppers, sales tax is annoying and should be repealed forever. Instead of just straight up removing the sales tax, the income tax should be

it is a somewhat unorthodox system that would eliminate income tax for all tax brackets and would instead enforce a 30% sales tax on new goods and services; however, his tax would essentially not be included on necessities such as food. This idea is popular with certain conservatives, notably Governor Mike Huckabee, because it enforces a universal tax policy that forces everyone to pay equal amounts of taxes based on their spending rather than income. Also, purchasing goods is an act that can be controlled so citizens have more control of their money. Another reason why this idea might be appealing to conservatives is because it would definitively eliminate the IRS due to retailers being able to submit taxes directly to the

With the presidential elections coming up, different tax policies are being debated between the candidates. Whether it is proposed by a Democratic or a Republican presidential candidate, there have been many possible solutions presented on how to reform the current tax code. Focusing specifically on four candidates, two from the Democratic Party, and two from the Republican Party, I will compare and contrast their respective tax proposals. While the Democratic candidates generally agree with President Obama’s current tax code, all four candidates are looking to reform it in some way in order to, in their own eyes, better the current tax code affecting today’s citizens.

The national sales tax would replace our current income tax system by taxing goods and services. Under this system of taxation, people would pay taxes on every item purchased and not on income. This would help the economy through sales. "There would no longer be an inheritance tax or a capital gains tax. The government would impose a 17.65 percent tax on the value of all final sales to consumers. To protect lower-income citizens, the government would send all households periodic rebate checks, the net effect of which would be to offset the tax burden on purchase up to the poverty level" (Mitchell 2). This national sales tax is a popular

In America, we enjoy freedoms that we often take for granted. We have the power to decide things for ourselves, such as our leaders, our rights, and our liberties. We have the ability to debate and evaluate the effectiveness and the relevance of a law or bill, and we must use this power when it comes to the methods of taxation. Currently, the US uses a progressive income tax as its means to raise revenue. Deborah Lee and Richard A. Grant, in “Counterpoint: Expanding Sales Taxes Helps the Rich, Hurts the Poor,” believe that a progressive income tax is the fairest and most constructive ways to fund the government, and that such a tax benefits the poor more than a sales tax.

Tax policy is among the most influential drivers of economic development. Naturally, it’s also one of the most debated and pressing issues facing policymakers in the United States. Today, the U.S. federal tax system is generally progressive, meaning that the total federal tax constitutes a larger percentage of income for higher-income individuals and households than it does for those earning lower incomes (Piketty and Saez, 2006). However, not all individual taxes are equally progressive. Some are even regressive. For instance, payroll taxes for Social Security and Medicaid are regressive (Piketty and Saez, 2006). But the taxes responsible for generating a majority of government revenue are the individual and corporate income taxes. Both of these taxes are progressive, which yields an overall tax system that is

However, an issue with increasing or broadening consumption taxes such as the GST is that low income households are disproportionately impacted due to flat increases in the price of goods and services costing a higher percentage of their disposable income when compared to wealthier households (Congressional Budget Office 1992, p. 75). A survey of low to middle income households showed that 89% of respondents were either ‘very concerned’ or ‘quite concerned’ about broadening the GST base (NSW Council of Social Service 2015, p. 39).

The United States economy, as known by all, is not in its best shape. One way in which the government gains money is by imposing taxes on people. There are many taxes that are placed on different things that everyone needs or already has. The United States uses a taxation system which is criticized by many. The system used in Progressive Tax; however, many people believe the system of Flat Tax, or Proportional Tax, should be the system that is used for taxing.

Even with our flawed tax system, the incomes that delivered by our taxes has strengthen our nation’s economy. As a result, it has reserve the essential goods

Opponents of such taxation emphasize that electronic commerce does, generate substantial revenue for state and local governments from a variety of tax sources, including business and personal income taxes, and that additional tax revenue is hardly needed at a time when the economy is booming and most state government budgets are met. They feel competition between the nation’s state and local tax jurisdictions helps hold tax rates down to their cost-effective minimum. If one state or city imposes a sales tax rate that is too high in relation to public services those taxes help finance, its tax base will shrink as businesses and consumers move to other jurisdictions with lower taxes and better roads and schools. However moving is costly. The ability to avoid high local taxes by making purchases over the Internet or through mail-order catalogs supplies an alternative margin of competition that forces governments to be more fiscally responsible. (Kemp 2000)

Goods and Services Tax (GST) is the current topic which is continuously in flash under the scenario. First of all, we have to understand the meaning of GST. Goods and Services Tax (GST) is a comprehensive VAT system which will ultimately ensure flow of uninterrupted credit among different sectors whether in manufacturing of goods, sale or consumption of goods and services. It is one indirect tax which will be levied on the supply of goods and services at the national level which will make the entire nation (India), a single or common market. Almost all indirect taxes will be eliminated, once GST comes into power. One of the most basic feature of Goods and Services tax is that consumers will have to pay the tax for one time at the final level of the transactions on the supply of goods and services but not at the various levels. The thing which is more interesting about Goods and Services Tax is that it will avoid both ‘cascading effect’ and ‘multiplicity’ of tax. Here, the word ‘cascading effect of tax’ means paying of tax on tax which is already paid on previous purchase