A move to do away with the federal income tax and replace it with a national 30% sales tax has been introduced in Congress.
Georgia Representative Buddy Carter says what is known as the Fair Tax Act would make it possible for Americans to “keep 100% of their hand-earned paychecks,” by not having to pay for Social Security taxes.
The legislation would also eliminate all corporate income taxes, while additionally repealing the current federal tax code in favor of a single national consumption tax.
On his website, Carter says that the proposed Fair Tax Act is “not riddled with shelters and loopholes, meaning wealthy taxpayers cannot minimize what they pay in taxes, regardless of how many lawyers and accountants they hire to advise them.”
In introducing his bill, Carter remarked: “Instead of adding 87,000 new agents to weaponize the Internal Revenue Service against small business owners and middle America, this bill will eliminate the need for the department entirely.”
The proposal has met with decidedly polar responses. Florida Representative Kat Cammack, who is a co-sponsor of the legislation, has characterized the Fair Tax Act as a “simplified and fair code that works for all, not just some.”
But House Minority Leader Hakeem Jeffries of New York, in a news conference, charged that the legislation will “impose a tax hike that is dramatic on 90% of the American people, working families, middle class folks, seniors and those who aspire to be a part of the middle class.”
While prospects for the legislation may be promising in the House, the odds of passage in the Senate are doubtful. Appearing with Jeffries, Senate Majority Leader Charles Schumer said he would do everything possible to defeat the legislation.
Although versions of the Fair Tax Act have been aired before, notes The Hill, “frustration over the $80 billion funding boost for the IRS passed by Democrats last year has Republicans wanting to make bold statements about changing the tax code—including scrapping it altogether.”
An analysis of the legislation produced by the Brookings Institute remarked that there is “no historical precedent for a country to enact a high-rate, enforceable, national sales tax. That does not mean it is impossible, but extreme caution would be appropriate.”
By Garry Boulard
