What Can Be Done to the Tax System of the USA

As might be expected, one of the reasons why a value-added tax/sales tax/fair tax has not caught on within the United States is because a preponderance of negative trade-offs exists with regards to implementing this.1 As a function of seeking to understand this issue to a more complete degree, the following analysis will present the reader with an understanding of how a federal sales tax represents both positive and negative externalities and could ultimately harm many at-risk individuals within the current society. The current complex and ineffective tax system in the United States needs to be replaced with a flat tax system to avoid the country from falling further into an economic collapse.Although the analysis will most certainly go into a greater level of death concerning each of the pros and cons of a potential federal sales tax, figure 1.0 below helps to sustain sleep illustrate some of the key points that will be under discussion within this brief analysis.As can be seen, the main benefits that a federally mandated sales tax could incur would most certainly be with regards to leveling the playing field between all taxpayers within the system.2 The current system is one that places an undue level of stress upon certain individuals within society while others do not have any tax burden whatsoever. As such, a federally mandated sales tax would be a system that would invariably change this dynamic and ensure that each individual who participates in the economy would be the same rate. Another added benefit is about the fact that a nationally mandated sales tax would serve to increase investment. Because investments themselves and savings would not be taxed, individuals would realize that a heavy national sales tax burden would encourage them to save their money rather than spend it.