As taxpayers across the United States prepare to pay Uncle Sam by the April deadline, many are pining for a simpler and perhaps fairer system. There’s been quite a bit of debate in recent years about how the nation’s tax code could be revamped — and one such proposal is the so-called FairTax.
What is it?
Although there are a number of factors that would have to be implemented in order for this plan to replace the system currently in place, the underlying principle of the FairTax is pretty straightforward:
- Virtually every item would include a 30% federal tax
- Taxpayers would receive a monthly check to help pay the tax on essential items
- The FairTax would effectively replace the current income tax system
Who supports it?
This system has received significant praise from many prominent conservatives dating back to the end of the 20th century. As it stands, two dozen lawmakers — all Republicans — have co-sponsored a bill in Congress that would implement the FairTax nationwide.
The late Herman Cain centered his failed presidential bid on a variation of the FairTax. Several other high-profile Republicans, including John McCain, Rick Perry, Ted Cruz, and Mike Huckabee have also put their reputations behind the proposed tax system.
Who opposes it?
If Republicans are virtually the only ones for the FairTax, it stands to reason that most of its detractors are Democrats.
Even though it would essentially create a universal basic income, which many progressives support, those on the left tend to think that the FairTax would create an undue burden on the poor while allowing the wealthy to pay a lower total percentage of their income in taxes.
Some conservatives are also against it, arguing that it would increase the deficit, force seniors to pay more, and create an incentive for black markets.