The FairTax system of taxation should be adopted in the USA

FairTax is an incredibly simple poroposal for tax reform that was designed by correcting the many flaws with the current income tax. FairTax is so simple that the entire tax code is just under two hundred pages while the current tax code is seventy thousand pages. FairTax is a sound taxing method that will improve the lives of the consumer, producer, and the economy. What is FairTax? FairTax is a twenty-three percent inclusive consumption tax that will tax all services and new goods that is in its final stage of production while repealing every other federal tax. It is important to note that the tax will only be applied to new goods so preowned cars and homes will be tax free on the federal level. Furthermore, since it only taxes goods in the final stage of production, aka the retail stage, the goods will not have any price inflation because of taxes along each stage of its production. FairTax would be beneficial to the country as a whole. In order to prove this, I will begin by describing the benefits to the everyday person, the consumer. Firstly, the individual gets to keep all of his salary. Currently, the income tax may take a large chunk of his gross salary and leave with a significantly smaller net income. In many cases, the individual just accepts this net salary and does not even realize what happens as it is all forcefully withheld from his gross salary. Imagine getting to take home one hundred percent of a well-earned salary, and imagine only getting to take home seventy "five percent of a well-earned salary. Which feels better? At this point, it is understood that the amount of money in a person"s bank account would increase, but this does not earn much if all goods cost significantly more. Luckily, they will not. The thing is, with our current convoluted income tax system, the price of nearly every good is inflated by approximately 22% due to the taxes tacked on at every stage of production. Without the income tax, that additional cost would disappear leaving us with cheaper goods and more income. Therefore, purchasing power dramatically increases and, as a result, the demand curve shifts way to the right. This is good for business. Unfortunately, many of the tax"s opponents insist that the system would shift the tax burden to the poor. This is because they are ignorant of the tax system. FairTax will provide a prebate system to offset the taxes paid on life"s necessities like food and shelter. The prebate is a monthly payment to each household based on the number of people living in it. For example, a family of four would get a larger prebate than a family of three. This entirely prevents the tax burden from being shifted onto the poor and middle class families. FairTax will also benefit the individual because it is significantly simpler. No more tax day. No more refunds. No more long documents to fill out. No more wondering if you qualify for a deduction. It is super simple"as simple as buying something actually. This of course, would also reduce the IRS to 5% of its current size. I have never met anyone who says that is a bad thing. What about benefits to the economy? Yes, a tax rate of 0% may be good for the consumer but bad for the economy, so it is important to describe the economic and fiscal effects of this tax bill. Firstly, everyone will pay taxes. There will be virtually no avoiding it. People on the underground economy will pay it and illegals will pay it. Of course, illegals will not get the prebate, so these people are 100% profit! Furthermore, it is expected that FairTax will boost revenue 352 Billion dollars in the first year alone. This is because everyone will pay the tax, the economy will grow, and more will be spent and saved. Also, the FairTax provides something that the income tax lacks, and that is stability. People will always know what they pay and businesses do not have to worry about huge hikes in their marginal tax rates. Furthermore, businesses will flock to America because it will have the single most competitive tax system in the developed world. This will lower unemployment and increase demand. Also, wealthy individuals will no longer have incentive to hide their money in offshore accounts because there would be no income tax to hide from. That means that all that money comes into US banks which would lower interest rates and lead to business expansion. In fact, it is estimated that the economy could grow up to 10.2% after institution.