Benefits of the Fair Tax Act

This week’s post expands on the Americans for Fair Taxation post from last week with a discussion of a few of the benefits of the Fair Tax Act.

This tax system differs from many of the other flat-tax concepts that have been presented because it completely replaces our current system, while other options will retain at least a portion of our present structure. It is also designed to draw only the same amount of money out of the economy as what is due to the government without retaining any in and of itself.

One of the main benefits that Fair Tax proponents claim their system will provide is massive economic growth. Because the tax will only apply to consumer goods and services, wealthy investors and institutions will be motivated to invest in tax-free havens such as light and heavy industries, production facilities, charitable organizations and other avenues of commercial development that would create millions of jobs and develop our infrastructure. The tax system will be vastly simplified because we will not have to file any more income tax returns, which will lead to further savings because there will no longer be a need to fund the IRS.

Foreigners and other visitors from outside the country will also help to fund us with their retail purchases and could even provide financial equalization from illegal immigrants, since they would not be eligible to receive prebate checks. The system also promises to replenish the Social Security trust fund and provide citizens with greater freedom to choose how much tax they through their personal selection of goods and services.

Advocates of the Fair Tax have been quick to point out that Florida and Texas-two of the richest states in our country-use a state tax system that resembles their idea in several respects. England also experienced one of its most prosperous eras when it used a sales-based tax after the defeat of Napoleon.

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