FairTax FAQ's / Tax Evasion

How will the FairTax reduce tax evasion?

The old aphorism that nothing is certain except death and taxes should be modified to include tax evasion under the current tax code! The IRS estimates that at least 40% of Americans no longer comply with the current tax code.

Most of this non-compliance is unintentional and due to the enormous complexity of the present system. However, what this non-compliance costs the IRS raises taxes by over 33 percent for those of us who do comply! These IRS figures do not include taxes lost on illegal sources of income.

Disrespect for the tax system and the law has reached dangerous levels, and makes for a system based on taxpayer self-assessment less and less viable. The FairTax will greatly reduce the problem of tax evasion.

The FairTax is simple and straightforward. The increased fairness, transparency and legitimacy of the system will induce more compliance. The roughly 90 percent reduction in filers will enable tax administrators to more narrowly and effectively address non-compliance and will increase the likelihood that tax evasion will be uncovered.

The relative simplicity of the FairTax will reduce confusion and promote compliance. Businesses will need to answer only one question to determine the tax due: how much was sold to consumers? Those who are able to easily evade taxes under the current income tax system will not be able to do so under a federal sales tax.

Finally, because tax rates will decrease, tax evasion will become less profitable, and because of the dramatic reduction in actual tax filers, tax evaders will be more easily caught under the FairTax system.

 

Ready for more?

 

Ready to take action?

Find out how you can make a difference