Do you know about Fair Tax Act? What are the major advantages that one can have through the implementation of US FairTax Act? What are the things that you should always keep in mind in relation to the Fair Tax plan of the Government? The team at Credit Health Care is here to give you all the answers that you need to know about the way taxes should be paid in the country.
Now, let us talk about the Fair Tax Act which has been modified over the years in order to get a fair deal to the citizens of the country. Do note that, the FairTax is becoming tax free on mortgage interest up to the federal borrowing rate for similar law instruments as determined by the Treasury department.
Explain Fair Tax Act
The Fair Tax Plan is a sales tax proposal to replace the current U.S. income tax structure. It abolishes all federal personal and corporate income taxes. It also ends all taxes on gifts, estates, capital gains, alternative minimums, Social Security, Medicare, and self-employment. The plan replaces them with a federal retail sales tax of twenty-three percent to be administered by state sales tax authorities. The sales tax would not apply to imports, commodities used to produce other products, or used goods.
Uses of FairTax Act
A group known as Americans for Fair Taxation developed the Fair Tax Act of 2003. The proponents also argue that, since workers would keep 100 percent of their wages, the increased consumer spending would lead to an increase in gross domestic product, jobs, productivity, and wages. For example, business expenses that are used to create the final product would not be taxed. Small business owners could declare a purchase a business expense to avoid the sales tax and compliance could become very expensive to monitor and enforce.
So, Fair Tax act has been of various advantages to the customers in the country. The tax is levied once at the final retail sale for personal consumption on new goods and services. Purchases of used items, exports and all business transactions would not be taxed. Also excluded are investments, such as purchases of stock, corporate mergers and acquisitions and capital investments. Savings and education tuition expenses would be exempt as they would be considered an investment rather than final consumption. Thus, the time has come for the readers to implement the things which are discussed in this article on Fair Tax plan.