Let’s start out by examining what the Fair Tax Act is. The Fair Tax Act is a tax designed to replace all federal income taxes. The plan was created by Americans for Fair Taxation, an advocacy group formed to change the tax system, this group states that, together with economists, it developed the plan and the name “Fair Tax”, based on the desires of the general public. Because the word “fair” is subjective, the name of the plan has been criticized as deceptive advertising by some, while being publicized as true to its name by others.
The Fair Tax Act has a lot of arguments going both ways, some of which are for it while others are completely against it. The following are some arguments in favor of the Fair Tax Act:
- Federal income taxes will be completely eliminated, and in its place a single broad national consumption tax on retail sales.
- With the repeal of federal income taxes, the IRS would basically cease to exist.
- The Fair Tax will not punish businesses for expanding and creating more jobs, investing in research and development, or donating to charity.
