Essay on The Tax System Of The United States

2139 Words Mar 13th, 2016 9 Pages
The federal income tax that has been used in the U.S. for most of the twenty-first century has been in place ever since 1913. Today, the sources of federal tax revenue from taxes are collected from individual income taxes, Social Security and other payroll taxes, corporate income taxes, excise taxes, and estate and gift taxes. Over time politicians and scholars have suggested ideas of switching to consumption based means of taxation many times but it hasn’t been well supported until the past five or six years. A consumption tax, which has many names and variations such as the “VAT” tax or “Fair tax” is the idea of a tax that eliminates all federal taxes listed above and solely taxes on the consumption of retail goods. Most countries, especially in Europe, have the “VAT” tax system in place at some level. Proposals now exist in the United states to shift from a progressive tax system to a system that only uses consumption taxes. The most popular system that has been introduced is the “Fair Tax”. This tax reform has been introduced formally by Jerry Moran, Governor of Kansas, as a tax reform proposal that imposes tax on consumption of taxable property or services. It states that the sales tax will be 23% in 2017. There could be adjustments to the rate over the years and there are exceptions form the tax for used and intangible property, for property and services purchased for business, export, or investments. Some individuals agree with this movement because it serves as an…

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