The topic on tax always seems to be the most difficult for me. I feel like there is endless information
that needs to be known and followed when discussing tax. Therefore, now and in the module,
sections it was good to be able to dive into the meanings behind tax and why they are done the way
they are. I love that there are endless resources to use when the tax topic is brought up. Using the
resources is what and how I got through this course and the previous tax course I had to take. I have
friends who reach out to me now asking for tax advice and I inform them I am the last person so
give any type of tax advice I would recommend going to see a tax professional.
I feel like the tax protocol changes all the time therefore, I do believe congress should consider other
approaches. I feel like if they do this and keep up with the times and the technology it is important. I
am sure that the Fair Tax Act and those alike benefit a certain tax group and will always do so. I
believe that taxes should be based on the income being brought to the table. "[The Fair Tax Act]
would allow the nation’s wealthiest families to accumulate even greater intergenerational wealth,
thereby widening the nation’s already sizable wealth gap" (Ross 2023 p2). I believe this statement
right here and the "plan" congress has on making this a thing is very unfair to the people that work
day in and day out to provide for their families. If everyone was expected to pay the same
percentage from their yearly salary then it would be “fairer” to everyone. Rather than making the
"wealthy wealthier." This "plan" only seems to benefit the wealthy that is already wealthy, so no,
there is no benefits for everyone.
A good explanation and introduction from my federal taxation of individuals class were the words
from Benjamin Franklin: “Nothing is certain except death and taxes.” c The two inevitable things in
life that we are not able to avoid. c Not even leaving the country, talking about the taxes, because our
tax law is based on territory. c According to the IRS, “If you are a U.S. citizen or resident alien, the
rules for filing income, estate, and gift tax returns and paying estimated tax are generally the same
whether you are in the United States or abroad. You are subject to tax on worldwide income from all
sources and must report all taxable income and pay taxes according to the Internal Revenue Code.” c
Anyways, I have learned a lot from this class about the other side of the coin, the federal income tax
of corporations and partnerships. Also, this class taught me the “pros and cons” choosing each
entity. c While picking one from another, each one was unique according to the business or personal
goals. c
Now, the Fair Tax Act is planning to replace the mass income tax with a class income tax and a
federal value-added tax. c This plan is trying to find a balance but even though it is targeting poverty,
it is my opinion that there will always be a sector trying to get the advantage of the system. c c After
the pandemic, getting the task force has been difficult for some companies because many people
realized that “teleworking” and passive income were ways to manage their own lives instead of
being ruled by a “schedule” or work for somebody else. c c As with any other project, it has “ups and
downs” or taking out and bringing new concerns to the table. c When many people believe that our
tax regulations are favoured by some and not others, poverty is not going to be eradicated by
facilitating monthly checks or providing advanced tax refunds. c It must be more educational and
work on the problem with the resources we have on our hands. c
VAT, or value added tax, would provide a benefit to the US in the form of increased tax revenue.
however, the management of the revenue would be an ongoing concern. if the revenue was used
for specific programs, such as the full funding or expansion of programs for education (primary and
college) or funding healthcare or other social security programs, I could get behind that. no one in
this country should have to be concerned with their next meal, high medical expenses, food, or a
roof over their heads (regardless of their past transgressions). however, I think for this to happen,
laws would need to be written to make it so the funds are used correctly and not for other interests.
However, there is a concern about those who are already struggling to provide necessities and the
implementation of a VAT. as a VAT is a tax universally applied, it would be applicable to those who
struggle. without raising taxes on the wealthy, this could potentially create further wealth
inequalities (Investopedia team, 2022). this could be viewed as a regressive tax so if it is
implemented in the US, a tax on those who are very wealthy should also be implemented in
tandem. The current tax system works well for the current economy. However, with different
economies or future economies, the current tax system may not always be the best. I personally find
value-added tax to be helpful in some cases, such as raising children. I do not feel quite as
comfortable with the Fair Tax Act yet. The Fair Tax Act of 2015 is a “tax reform proposal that
imposes a national sales tax on the use or consumption in the United States of taxable property or
services in lieu of the current income and corporate income tax…” (114th Congress, H.R.25 – FairTax
Act of 2015). In my opinion, this may discourage spending, and overall put more burden on lower
income families’ lifestyle. Furthermore, discouraging spending may harm the overall economy. This
creates a vicious cycle of low spending, unstable economy, and deficit tax revenues. However, I do
think that there are certain amendments to the Fair Tax Act of 2015 that may make it work better.
References
Congress. (n.d.). H.R.25 - 114th congress (2015-2016): FairTax Act of 2015. Congress.gov. Retrieved
April 4, 2023, from https://www.congress.gov/bill/114th-congress/house-bill/25
Team, T. I. (2023, April 1). Value-added tax (VAT). Investopedia. Retrieved April 2, 2023, from
https://www.investopedia.com/terms/v/valueaddedtax.asp
U.S. Citizens and Resident Aliens Abroad | Internal Revenue Service (irs.gov)
International Taxpayers | Internal Revenue Service (irs.gov)
Anderson, K., Hulse, D., Rupert, T. Pearson’s Federal Taxation 2023 Corporations, Partnerships,
Estates, and Trust. Pearson 2023
Pratt, K. (2022). Learning to Live Without Form 1040. Tax Lawyer, 75(2), 411–442.
Ross, J. (2021, November 17). The 'fair tax' act would radically restructure the nation's tax system in
Favor of the wealthy. Centre for American Progress. Retrieved April 6, 2023, from
https://www.americanprogress.org/article/the-fair-tax-act-would-radically-restructure-the-nations-
tax-system-in-favor-of-the-wealthy/
