With the 2016 election around the corner, the U.S. has been debating what changes should be made to the U.S. tax code. This presentation questions if a national sales tax would be a viable solution.

1. Could the U.S. Ever
Adopt a National
Sales Tax?

2. 3,951,104
The U.S. Tax code is a whopping
3,951,104
words long!

3. That adds up to 73,954 pages!

4. In total, individuals and businesses in the
U.S. spend approximately $170 billion and
6.1 billion hours per year on tax filing.

5. These numbers raise an important question:
Will the tax code every be simplified? If so,
how?

6. Several solutions for simplifying the
tax code have been introduced over
the years. One of the most dramatic
solutions is the Fair Tax Act which
includes a national sales tax.

7. The first Fair Tax proposal was
introduced by John Linder (R-GA) in
1999. Since then, a variation of the Fair
Tax Act has been introduced in every
session of Congress.

8. Senator Ted Cruz, whose current presidential campaign
has been built on overhauling the tax code, co-sponsored
the Fair Tax Act in 2013 and again in 2015.

9. What exactly does the
Fair Tax Act propose?

10. No gift tax No federal
income tax
No payroll tax
Elimination of
the IRS
No estate tax
An advance
refund to
households
A 23%
national sales
tax
ATTRIBUTES OF THE FAIR TAX

11. Let’s see what supporters and critics of the Fair Tax have
to say.

12. POSITIVES “Instead of imposing the highest amounts of taxes on taxpayers’ earnings, the
national sales tax would focus more on what consumers spend” –Joe Garza
Encourages
saving
Creates
jobs
Mandatory
taxation
for all
Frees up
time and
money

13. POSITIVES
National consumption of goods should go
down due to increased prices.
Encourages saving

14. POSITIVES
Elimination of the income and payroll taxes
would lower employment costs for businesses.
Creates jobs

15. POSITIVES
Paying taxes would become unavoidable in
this consumer based nation.
Mandatory taxation for all

16. POSITIVES
Time and money spent figuring out your taxes
can be spent elsewhere.
Frees up time and money

17. “[Income tax] punishes the productive by
taxing them the highest amounts, reduces
jobs by increasing the cost of employees
and reveals our personal finances and thus
invades our privacy.”
-David John Marotta
Forbes Contributor

18. ”If there is an easy way to evade taxes, it is likely that a large number of people
will participate in it” –Mike Moffatt
NEGATIVES
It would add
onto state taxes
States would
try to avoid it
Tax evasion
would rise
Overseas spending
would Increase
May not cover all
U.S Expenses
Invades your
Privacy

19. NEGATIVES
A national sales tax would not eliminate the
state sales tax, they would both be factored
into each purchase.
It would add onto state taxes

20. NEGATIVES
Some will turn to buying their products
overseas to avoid higher prices.
Overseas spending would
increase

21. NEGATIVES
The tax compliance burden would shift onto
businesses making it easy for businesses to
report less revenue and pocket more of the
money.
Tax evasion would rise

22. NEGATIVES
States and local governments would likely
lobby for laws to make themselves exempt
from paying the sales tax.
States would try to avoid it

23. NEGATIVES
Since every purchase would be subject to the
sales tax, the government could easily keep an
eye on your spending.
Invades privacy

24. NEGATIVES
People may not spend enough money to
cover government expenses like hospitals,
schools, and law enforcement.
May not cover all U.S expenses

25. Let’s see how this might affect
our country’s different families

26. JILL & GREG
Server & Hostess
THOMAS & JOYCE
Mechanic & Senior Business
Analyst
DONALD & CLAIRE
Lawyer & Mother
RACHEL
Small Business Owner

27. Fair Tax
Age: 23 & 24
Income: $20,000
Assets: Parents, Flexible
Schedules
Liabilities: Bad Credit, Low
Education, Child
Income Tax
o The family has enough to get by with
potentially a little left over every
month for entertainment or savings
o Can get tax breaks based on income
and family size
o Necessities would cost more, which
would lead to the family only being
able to spend money on necessities
o The family would be spending more
on their son, due to the lack of tax
breaks for children
Back Story
Melissa and Travis are two young
parents from Farmersville, Texas. They
currently live paycheck to paycheck.
They own one vehicle, and carpool to
work. Melissa’s mom is able to watch
their son, Malcolm while they work long
hours.
MELISSA & TRAVIS
Server & Hostess

28. Fair Tax
Age: 30 & 28
Income: $100,000
Assets: Parents, Homeowners,
Dual Income
Liabilities: Children, Property
Taxes
Income Tax
o Thomas and Joyce receive tax breaks
because of their son as well as
owning their home
o Their actual net income is about
$80,000 instead of the $100,000
they signed for
o Thomas and Joyce will receive no tax
breaks for Thomas Jr. or their house
o Their cost of living will increase,
especially because of increased
spending required for Thomas Jr.
o The value of their home will decrease
Back Story
They have a wonderful son named
Thomas Jr. The family just paid off their
home. Thomas is a auto mechanic while
his wife is a Senior Business Analyst for
a large conglomerate.
THOMAS & JOYCE
Mechanic & Senior Business Analyst

29. Age: 50 & 44
Income: $2,000,000
Assets: Homeowners, Law
Degree, Investments
Liabilities: Children, Higher Tax
Bracket, High Spending
Income Tax
o Donald receives less than what he
signed for
o They receive tax breaks for their
children and home
o They pay a higher percentage of
taxes because of their income
o Donald and his family will receive all
$2,000,000 each year
o The value of Donald’s home will
decrease
o The cost to maintain their lifestyle
will increase
o The return on Donald’s investments
will increase
Back Story
Donald and Claire have been married for
8 years. They have two children, Louise
and Dennis. Donald works for a large
and well-known law firm while his wife
stays at home with the kids. The family
currently has many investments and can
afford a very luxurious lifestyle.
Fair Tax
DONALD & CLAIRE
Lawyer & Mother

30. Age: 35
Income: $500,000-$800,000
Assets: Business Owner,
Variable Income
Liabilities: Non Employee, High
Tax Rate
Income Tax
o Rachel is not able to hire as many
consultants to her firm due to higher
business expenses
o Rachel pays a higher tax rate, but
gets many tax breaks and write-offs
as a business owner
RACHEL
Small Business Owner
Back Story
Rachel created a healthcare consulting
firm. She has, thus far, been successful
bringing in a large variety of clients. As
the owner of the business, she is solely
responsible for filing all taxes on her
company’s annual revenue, which varies
based on the company’s performance.
o Rachel can hire more consultants
because of increased payroll
o Rachel loses her business tax breaks,
but no longer pays payroll taxes or
taxes on capital
o Rachel will have to keep up with the
consumption tax people are paying
for her services to pay it to the
government
Fair Tax

31. What’s the takeaway?What’s the takeaway?

32. The national sales tax has been debated for more
than a decade and still hasn’t been implemented.

33. The changes from a national sales tax would be
hard to transition into.

34. It’s hard to say if the national sales tax will ever be
passed, but with the coming election and the support
of some GOP candidates, its likelihood is increasing.

35. Questions l Thoughts l Comments
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