Fair Taxation will transform the American economy virtually overnight.
Our nation’s corporate tax rate (nearly 38 percent) is extremely high – and when you factor in state taxes, the U.S. has the single highest tax rate in the world.
Operating a successful business requires asking tough questions – and one of the questions that businesses around the world ask themselves is, “Where should I base my operations? What location is most friendly to my business? Where will I see the greatest value and profit?” With our high tax rate, the answer to that question is clear, and we continue to push companies away from the U.S. to other countries where they can keep more of their earnings.
Under the Fair Tax, the United States would go from being the highest to the lowest corporate tax jurisdiction in the world, putting us in a position as a leader in competitiveness as well.
If businesses were encouraged to locate here rather any of our trading partners, we would immediately reap tremendous benefits from our economy, including:
1) Reduced unemployment. According to the Bureau of Labor Statistics, our national unemployment rate is 6.7 percent. But that number doesn’t tell the whole story. There are between 46 and 47 million Americans receiving food assistance, and the labor participation rate has been falling drastically, having hit an all-time low – and that shows a critical need for jobs in our country.
2) Increased wages. These un- and under-employment numbers drag down wages. It’s simple economics: too much supply and not enough demand will continue to lead to depressed wages unless something drastically changes. The Fair Tax will bring about those changes, by spurring an increased demand for labor, translating into better wages due to greater competition.
3) Lower government spending. With unemployment and an increasing number of Americans relying on assistance, our social safety net has never been more strained. The Fair Tax can reverse that trend. With an increase in the number of jobs available, the demand for social spending will quickly decline as individuals and families will have greater resources in their own households – and this will directly lead to the reduction in the current annual deficit, as well.
With these benefits, the Fair Tax will transform our economy – something that will benefit each and every one of us.