Pros And Cons Of Consumption Tax

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Numerous politicians are in favor of reforming the United States tax system to consumption tax. Our basic tax system is tax that the government imposes on all working individuals including businesses. Per law, all workforce women, men, and young adults are required to file an income tax return every year; this can dedicate if they owe any taxes or may be eligible to receive a refund. To determine such taxes owe or refunds, the government utilized a progressive tax system, which higher income earner pays a higher tax rate compared to those who earn a lower less. This tax system is a crucial part or role to the government after all, this is their primary source of funds to support their activities and to serve the public.
On the other hand, consumption tax imposes on goods and services like sales tax, tariffs, and
The effects from consumption taxes may seem welcoming for the bulk of taxpayers, but it too seems threatening for the economy. This type of tax system brings more job opportunity and enables people to save more money, which both helps sustain a stable growth for the economy. In order to stable the economy, the government collects their revenue directly from consumer goods at the point of sales through companies or retailers, which enables business to keep booming and make profit . Clearly, this seems to maintain stable cycle and yet it also generates problems within the consumption tax system. The system could also jeopardize the economy through high sales rate, creating a higher unemployment rate, which causes an inflation and affecting certain class levels than others. If the government was to replace the current income tax system with consumption tax now, this would threaten their funds towards public services. More likely, businesses would take advantage of the taxes and thus decrease consumer goods and services. Overall, consumption tax does not seem any fairer than the income tax

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