The tax implications along the way would also be helpful to know. I do
think that the tax system does need to be revamped although I don't
know what that would look like in the long run for businesses The
course titled ‘Federal Income Tax of Corporations and Partnerships’
has been extremely insightful and informative for me. By enrolling in
the course, I have got the opportunity to understand how tax rules and
standards are applied in the context of diverse types of entities such as
partnerships, C Corporations, S Corporations, etc. The concepts that
have been covered in the course have helped me learn how different
tax-related consequences may arise while liquidating a business entity.
Apart from focusing on the taxation aspects while liquidating a
business, it is essential to take into consideration the best practices
and ethical approaches of accounting so that an optimum economic
solution can be arrived at by a business owner.
Currently, in the United States of America, income tax is charged on
individuals as well as businesses. There exists a diverse range of
taxes, such as estate tax, excise tax, etc. which increase the
complexity of the current tax system. In order to streamline the existing
taxation system in the nation, the value-added tax can be introduced.
The value-added tax model can be appropriately adopted to promote
the economic growth of the nation (Acosta-Ormaechea & Morozumi,
2021). It is used as a useful tax instrument in several nations, such as
Canada, Bahrain, etc. VAT is considered to be a simple and efficient
way of generating revenue for the national government so that a
healthy economic landscape can be established (Bansal & Alfardan,
2020). By introducing this new taxation model in the U.S.A, it will be
possible to keep a proper tab on diverse financial transactions and
manage the money in an efficient way which can help to optimally use
funds that can facilitate national growth and development. The
strategic use of value-added tax can play an instrumental role in
boosting the economic growth of a nation and positively impact the
quality of life of the citizens (Mjaku 2020).
As far as implementing the Fair Tax Act, I absolutely think that would
benefit our economy greatly. It would introduce a fair across the board
tax. Some may argue that it caters to the wealthy, but in my opinion it
would not. It would allow workers to take home their full paycheck
instead of taxes taken out. Then it allows consumers to only be taxed
on what they consume. So, yes it would make everyday items to cost
more, however in my opinion it would level the playing field. The rich
has to by goods just like the working class and middle class. This
would allow the rich to pay taxes instead of using all the tax loop holes
they get to use as it is now. Social Security and Medicare will have a
more solid foundation with the Fair Tax Act as well. Also, in this Act
there is a progressive program called "prebate". Every legal resident
would get a refund at beginning of each month so all purchases up to
Poverty Level are Tax free. This would also allow benefits for legal
residents no illegal residents that avoid income taxes in the system
now, but reap benefits. By implementing this program all cash only
residents still pay their part. The IRS would no longer be needed and
would be done away with. I believe that would be the best thing to ever
happen. In my opinion the IRS is a waste of Tax Dollars and America
would save so much by not having them around and that would allow
for that money to be spent else where. That's my take on the Fair Tax
Act.
Reference
Acosta-Ormaechea, S., & Morozumi, A. (2021). The value-added tax
and growth: Design matters. International Tax and Public Finance, 28,
1211-1241.
Bansal, A., & Alfardan, A. A. (2020). Role of value added tax in the
economic development of Kingdom of Bahrain. Journal of Critical
Reviews, 7(3), 17-24.
Mjaku, G. (2020) “Value added tax as an important factor of tax
revenues in the Republic of Kosovo,” International Journal of Scientific
and Research Publications (IJSRP), 10(8), pp. 919–921. Available at:
https://doi.org/10.29322/ijsrp.10.08.2020.p104114. Fairtax.org (2023).
Retrieved from: https://fairtax.org/about/how-fairtax-works
