A lot of Bronx tax payers feel that the tax system applicable here is too complicated. It is thus that the wealthy and other exceptional groups are taking advantage of the same and the other tools to avoid the payment of taxes. It is this that a proposal to introduce Fair Tax Plan has now come up. There are many other reasons to this and it is thus that it has gained a lot of recognition too.
In the recent part the Fair Tax Plan is one system which is being well liked because it is one that is set to swap the complete federal tax system with countrywide sales tax. All who are in support of his introduction believe in this plan because they believe that it will surely help in getting rid of taxes and also distribute …show more content…
Once the taxes are collected at the time of sale it can be sent to the federal government then. As a result of this, your net income will not be looked up with respect to the exemptions which you claim. You will rather receive your paycheck absolutely tax free. Here if the legislation repeals the Sixth Amendment then there will be no rights with the Federal government to impose any kind of taxes. But if the local or state government wishes they can collect revenue by income and sales taxes.
Understanding the Pros of the Fair Tax Act
It is hard to believe but there are definitely certain advantages of a Tax act as well. Here are a few pros for the tax payer:
1. The act provides an opportunity for the tax payer to reduce the overall taxes paid by giving them the leverage to invest on other sources and hence providing them with an exemption for the same.
2. As a high income earner you will only be taxed on the total amount which is actually spent by …show more content…
For families that are close to the poverty line can enjoy benefits of prebates as it can help them in adjusting for the tax sales payments which have to be made.
7. As you will have a quick control on your expenditures made by the credit and debit cards it will improve the buying culture and reduce the taxes to be paid on the money spent. Understanding the Cons of the Fair Tax Act
With all the many advantages mentioned this tax plan also has some disadvantages especially for the lower income earning groups.
1.) This being a progressive tax the lower income group people will pay more taxes which will reduce their income portion making them bear a larger loss.
2.) As the sales taxes will be high a lot of consumers will plan buying items outside the country and this would contribute to increase in Tax Evasion.
3.) For the capitalist economy this plan will not work well because this can lead to decrease in money spending which will in a way lower the tax burden also.
4.) The families will have to pay state taxes by all means even though the federation income tax gets removes from the system.
5.) There are chances of vibrant economy because the rich will invest more but as per Fair Tax Plan the poor will be discouraged as the payments will be dependent on