AN ECONOMIC VIEW OF THE FAIR TAX
In the era of a pervasive debt crisis, economic gloom, and a high unemployment rate, the United States’ government is searching for ways to increase its financial resources. By using a regressive model to analyze information from the Congressional Budget Office (CBO) and Bureau of Labor Statistics (BLS), this paper attempt to test if an alternative, consumption-based tax system will prove to be more beneficial to the lower income-earners compared to the current tax system. In this study, the household size as defined by the BLS was used to identify the average pre-bate check for each household.
The Role of the Federal Government
Collecting and securing financial resources is one of the federal government’s most important tasks. To maintain its daily function that includes, preserving the nation’s sovereignty and its citizens, the United States government relies heavily on tax payers. In return, the federal government provides many services that help sustain the ability of individuals to enjoy liberty and pursue happiness. It’s a form of symbiotic relationship that has been fostering for decades.
The government plays a vital role in the U.S. economy; a review of our history backs this idea. America.gov suggests that “government involvement in the economy increased significantly during the most serious economic downturn in U.S. history, the Great Depression (1929-1940)” . This article goes on to articulate the myriad laws and regulatory establishments that were carved out of the New Deal legislative bill, giving the government the ability to regulate businesses. Agencies such as the Securities and Exchange Commission, the Federal Deposit Insurance Corporation, and the Social Security system, all “deemed indispensable” , were a product of the need to restructure the social and economic system. It is now 2011; and the Nation remains hopeful that the government can circumvent...