What would happen if there was just one tax rate for most americans would that be fair could it even work steve forbes chairman and editor in chief of forbes media explains donate today to . With the neutral tax you dont need to make a choice between a fairtax flat tax or any other tax policy at the federal level all those decisions are made by the states and then the federal government gets a fixed flat share of the resulting revenue. For a number of years conservatives have debated the merits of the flat tax and also the fair tax or what amounts to a unified sales tax both plans are impractical as standalone . Although they both have similar goals and would entail significant overhaul of the current system the plans differ is some fundamental ways whereas the flat tax would tax all income at the same percentage the fairtax wouldnt tax income at all it would instead institute a national sales tax next well explain the differences in more detail. The fair tax plan is a sales tax proposal to replace the current us income tax structure it abolishes all federal personal and corporate income taxes and ends all taxes on gifts estates capital gains alternative minimums social security medicare and self employmentthe plan replaces them with a federal retail sales tax of 23 to be administered by state sales tax authorities
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