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 do not 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 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 pay check 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 "probate". 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 elsewhere. That is 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:
