The Fair tax is a tax proposal that would replace all federal income taxes on personal and corporate income with a new consumption based tax system. The fair tax would tax us only on what we choose to spend on new goods and services, used goods would be exempt under this proposal. While the fair tax might sound like a good idea at first. When you stop and think about it, the fair tax proposal does not sound quite as good as some might lead you to believe. The fair tax taxes at a rate of 23% of every dollar you spend including the tax. Therefore, out of every dollar you spend, 23 cents of it would be taxes. This makes the 23% a little misleading because it is actually a 30% traditional sales tax.
When I first heard about this proposal, originally it sounded like a good idea to me. No taxes on money you earn, just on what you choose to buy. Sounds great right? However, after examining it a little further, here are some of the problems I see with it. First off, it hurts new car and home sales. Why would anyone buy a new car or a new home? When they can buy a used car or home and pay no taxes. Therefore, it would hurt jobs in the automotive and housing sectors. Then there is the fact that the more money you make the less of a percent of it you spend on new goods or services. Therefore, the rich would pay significantly less taxes because the tax system would be based on how much you consume not how much you make. The middle and poor classes would end up paying more in taxes under this proposal, based on the simple fact that they spend a much higher percent of their income on necessities.
The fair tax proposal does nothing to address government spending. Until the federal government can learn to stop spending frivolously, any proposal that is come up with will be in vain. We as a country need to let congress know that we are tired of the way they are handling our tax dollars. That the government needs to stop wasting tax dollars on wars and things that we should not be involved in and start living within our means. Until we start to pay off the national debt, it will continue to be a ticking time bomb waiting to explode.
So is the fair tax proposal good for everyone? You decide.
When I first heard about this proposal, originally it sounded like a good idea to me. No taxes on money you earn, just on what you choose to buy. Sounds great right? However, after examining it a little further, here are some of the problems I see with it. First off, it hurts new car and home sales. Why would anyone buy a new car or a new home? When they can buy a used car or home and pay no taxes. Therefore, it would hurt jobs in the automotive and housing sectors. Then there is the fact that the more money you make the less of a percent of it you spend on new goods or services. Therefore, the rich would pay significantly less taxes because the tax system would be based on how much you consume not how much you make. The middle and poor classes would end up paying more in taxes under this proposal, based on the simple fact that they spend a much higher percent of their income on necessities.
The fair tax proposal does nothing to address government spending. Until the federal government can learn to stop spending frivolously, any proposal that is come up with will be in vain. We as a country need to let congress know that we are tired of the way they are handling our tax dollars. That the government needs to stop wasting tax dollars on wars and things that we should not be involved in and start living within our means. Until we start to pay off the national debt, it will continue to be a ticking time bomb waiting to explode.
So is the fair tax proposal good for everyone? You decide.
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