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DynamicTrends.com
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The Benefits of the FairTax Plan |
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The FairTax is a revenue neutral, Federal sales tax, meaning the government still collects about the same amount of revenue as they do now for needed services, including Social Security. The FairTax will replace ALL forms of Federal taxes including ALL Federal payroll taxes that are deducted from your paycheck, such as Federal Income Tax, Social Security and Medicare Taxes. In addition, the FairTax would also eliminate:
Retailers would simply collect the tax and send it to the state taxing authority. The tax revenues from the states are then sent to the U.S. Treasury. The state and all businesses serving as collection agents would receive a fee for collection. The FairTax would be collected only once, when a NEW product or service is sold for the first time. In other words, the FairTax taxes wealth or consumption rather than wages. Used items and business-to-business purchases for the production of goods and services would not be taxed. We currently already pay 15% payroll tax plus 7% Social Security and Medicare tax for a total of 23%. Then on top of that, the taxes that a manufacturer pays for materials, equipment and labor to produce their products are added to the price. They also add the cost of tax compliance into the price. So there is a 22-23% tax that’s built into the price of goods and services that we now purchase, which in effect means that we’re actually paying those taxes twice. We’re paying our 23% AND their 23%. Because exports would no longer have the 22% built-in taxes added to the price of goods that we produce here in America, they would become more competitive. On the other hand, because taxes would be collected at the retail level regardless of where it was manufactured, imports would no longer have a tax advantage. Under the FairTax, we could control the amount of taxes we pay by simply choosing not to spend, or to spend less. Of course, everyone must purchase necessities such as Food and Medication, so a pre-bate would be given to every LEGAL American citizen or Family each month to offset these necessities. Ex. (ours amounts to $489.50 per month for a married couple with no children living at home). By Michael Scoglietti
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