Part 2/8:
In his recent address, Trump expressed a vision for the government to enrich its citizens by taxing foreign nations rather than its own citizens. The Fair Tax Act of 2025 implies that the income tax could be replaced by a system of tariffs. The intent is to shift the burden of taxation from citizens to foreign imports, stirring considerable attention in Congress.
Understanding the Current Tax System
To comprehend the impact of such a proposal, it’s essential to understand how the current tax framework operates. The federal tax code, which encompasses over 2,000 pages, is notoriously complex. Individuals are subjected to various forms of taxation, including:
- Income Tax: A portion of wages goes directly to federal and state taxes.