The income and payroll tax system saddles Americans with $1trillion of annual illegal evasion and endless loopholes, exclusions, exceptions, adjustments, deductions and credits. The omplexity is such that no one can comprehend it fully, not even those who wrote it.
The income tax is notoriously unstable with thousands of proposed Congressional changes made each year with lobbyists behind almost every one of them. The end result is a system that imposes an immense cost on U.S. businesses in both time and money. Any significant job-producing, economy-cultivating expansion or organic growth investment must first be analyzed by tax attorneys, consultants and CPAs to scenario plan, strategize and model out effects of potential changes to the tax code.
Under the FAIRtax, U.S. businesses will have a consistent, level playing field that treats all businesses fairly with no tax on any business income. Most U.S. businesses are wholesale companies selling products and services to other businesses along the supply chain and under the FAIRtax, there is no business to business tax. Only those businesses engaged in retail sales directly to the consumer will have to collect and remit the FAIRtax. That means that just a few companies (WalMart, Home Depot, Macy’s, Amazon, etc.) would bring in the vast majority of FAIRtax receipts. This will drastically reduce illegal evasion by over 90%.
Further, American companies will no longer have an employment penalty. The current obligation to match each employee’s 7.65% Social Security and Medicare tax withholding goes away under the FAIRtax. Also, the built-in embedded (and difficult to see) cost of income and payroll tax along the supply chain, estimated to be over 20% of the cost of all U.S. retail goods
