The Fair Tax Act has gained much needed attention, however, the act is still only being talked about and not enforced. And why is this? Like any idea, you have those that back it up 100% and those whose oppose just as strongly.
So what exactly is the fair tax act? My advice, if you’re not exactly into economics, pick up a few books and clear out an entire week on your schedule, and maybe by then you’ll understand the intro to the fair tax act. The only thing I can say that I know about economics and taxes is that when you purchase something in the US, you pay a 7% sales tax. Also, the government takes out about 10% of each one of my paychecks for medicare, social security, and state and federal taxes. In January each year, as long as you’ve worked, you get to file for an income tax, which will give you back a significant amount of money that you apparently have paid in taxes all year long. Other than this, my economics-based knowledge is pretty elementary. And yet I am being asked to give my opinion on the fair tax act. So where do I even start?
Talking taxes to me is like talking physics to a 5 year old. Not only am I just not interested, I can’t comprehend an entirely new subject in just 5 minutes. I will admit that not being that knowledgeable about taxes, and government, and economics makes me feel like a bad American. Guess I’ll join that club later. For now, I’ll attempt to give my POV on the fair tax act.
From what I’ve gathered, the main thing that stands out is that the fair tax will replace the individual income tax, which also means saying goodbye to that lump sum every year and many other Americans losing their jobs. So my question for that alone is “Will the fair tax help replace those jobs?” While I’m not too sure about the fairness in which the ratio holds for the income tax check a working individual receives each year to the taxes they actually paid in, I do admire that I get blessed with a few thousand dollars each year with an income tax check. Most people, like myself, simply don’t have the means to save money. There is usually always something that goes wrong in everyday life that requires you to have such an amount of money on hand; late on bills, car repair, new addition to the family, etc. I enjoy getting that check every year. So the fair tax act wants to do away with it? Yes. And they want to replace that with a single-rate personal consumption tax on all new goods and services. So basically, a single-rate personal consumption tax would be the new sales tax but would only apply to NEW goods and services and that new sales tax would be 23%. So then, am I being asked to choose from a 7% sales tax VS a 23% sales tax? With the 7% being taxed on everything, new and used, however, the 23% only being applied to NEW goods and services. Well, how long before everything becomes NEW again? I’m thinking, pretty flipping quickly. Garage sales certainly won’t become the new malls.
I think this is as far as I’ve made it in regards to the fair tax act. I see prebates and rebates and embedded taxes and I foresee many, many questions to arise. I cannot give a complete opinion on the fair tax because one has not fully formed. I can say that, however, it does interest me and I’m willing to devote some free time, and a Snickers bar, to digging deeper into the topic and hopefully add an extra voice for the American people as we struggle to keep our country out of the pits.