The methods used in the research included, surveys, interviews, evaluation and social research methods. The analysis of results from surveys, focused group discussions, sampling, key informant interviews, and other methods outcomes were recorded and disseminated. Findings and Discussion The Fair Tax Scheme: The fair tax proposal received increased support after it was endorsed by John Linder (Georgia Congressman). Linder describes the fair tax plan as the best tax collection scheme that would see the economy of the U.
S recover without exploiting the poor citizens in terms of taxation. Linder, through his book “The Fair Tax Book” in 2005 Co-authored by Neal Boortz, suggested that the U. S government needed a scheme that would collect just as much revenue as the current system but in a way that would be less intrusive and abusive. Though numerous congressional meetings have been held to discuss the matter, the bill has not progressed from the committee stage since 1999 (Pechman 1985).
The scheme is projected to increase accountability by financiers of the federal government also it would increase public independence, and taxation of illegal practices and unlawful immigrants. The fair tax scheme is aimed at taxing new consumer products and services at 23% sales tax. The current state income and state taxes would not be affected by these changes and the tax collection by the government can go on. Implementation of fair tax scheme would be executed through independent states but that does not exclude individual businesses from dealing with the federal government (Ose 2002).
The states and the firms that collect taxes on behalf of the federal government would be paid one quarter of 1% of what they collect. Objectives of Fair Tax scheme The first aim of putting this plan into practice is to reduce or cut down the intrusive, offensive and coercive nature of the current system, while at the same time collecting the same amount of revenue. The federal government would not get the opportunity to confiscate tax payers’ money (Ose 2002).
The major supporter of fair tax plan Mr. Boortz insists that the plan is revenue neutral and ratios would be established to enable the national government and all its departments, (security and healthcare included) get the same amount as what they had been getting from the current system by imposing national sales tax. The fair tax is not really intended to cut spending or scrapping of government’s benefits rather its sophisticated way of raising the same amount of money (Graetz 2008)
Fair tax would encourage tax compliance, make simpler tax policy and would present an effective means of tax collection on the government’s side. In this strategy, the tax burden will not be reduced in any way but it would greatly increase transparency in collection of taxes. There are several millions of shillings lost in terms of economic malpractices by some people who do not want to pay taxes. The fair tax scheme is designed to recover all these millions of shillings that are lost to tax evaders, tax avoiders and those involved in subversive and illegal economies.
The scheme would also ensure that users of offshore economic centers pay their fair tax shares and that restriction of employed citizens to tax for social security hence forcing the wealthy individuals to pay their fair share of tax. Families will not pay tax on essential goods and services while the middle class would be in actual fact exempted from levy payment on a larger fraction of their expenditure (Boortz et,al. 2008). The fair plan offers each family a rebate of the sales tax equal to the cash spent up to the poverty level set by central government (Boortz & Linder 2006).