Republicans Propose Bill To Replace Income, Payroll Taxes With National Sales Tax, Abolish IRS

Republican Legislators proposed a bill that would replace income, payroll, or estate. taxes • A national sales tax, while eliminating the IRS.

Rep. Buddy Carter (R.GA), introduced the Fair Tax Act to simplify the tax code, and tax collection system. Similar legislation was originally proposed by John Linder, a former Representative from Georgia. current iteration The House Freedom Caucus Chair Scott Perry (R.PA) is sponsoring the bill, as are lawmakers like Rep. Bob Good and Rep. Jeff Duncan (R.SC), Rep. Thomas Massie and Rep. Kat Cammack.

“As a former small business owner, I understand the unnecessary burden our failing income tax system has on Americans,” Duncan said it in a press release. “The Fair Tax Act eliminates the tax code, replaces the income tax with a sales tax, and abolishes the abusive Internal Revenue Service. If enacted, this will invigorate the American taxpayer and help more Americans achieve the American Dream.”

The bill established a 23% national sales tax. It will be in effect until 2025. According to the IRS, 49% of federal revenues come from federal income taxes, which were created in 1913 by the Sixteenth Amendment. data Source: Treasury Department. Social Security and Medicare taxes represent 35% of revenues. While corporate taxes contribute 10%.

Fair Tax Act would seek to repeal the Sixteenth Amendment, and then sunset the national sales taxes if it fails to do so within seven years.

The new legislation comes after President Joe Biden’s Inflation Reduction Act approved $80 billion for the IRS. Janet Yellen, Treasury Secretary said that the funding would allow staff to more easily assist Individuals and businesses who want to file taxes. report However, the Treasury Inspector General of Tax Administration indicated that the agency had not yet decided How the funds will affect audit rates for taxpayers of middle income.

Critics of the federal sales tax highlight the policy’s progressive nature. While the current federal income tax system is progressive, meaning that individuals tend to pay more as their income rises, sales taxes take a larger share of low-income households’ salaries since they utilize a larger portion of their wages for expenses, according to an analysis The Tax Policy Center.

Biden responded To the proposal, by claiming that the national sales tax would raise prices “everything from groceries and gas to food and medicine.” In his post, he neglected to mention the fact that the bill would also abolish income, payroll and estate taxes, while offering a variety of rebates and refunds to families. The repeal of the current tax structure was also not mentioned by Sen. Elizabeth Warren (D. MA). said You can find out more about social media “it’s not fair to impose taxes on working people, while giving massive tax breaks to the ultra-rich.”

Republicans have repeatedly called for the abolishment of the IRS. voted The agency was able to reverse the Inflation Reduction Act’s windfall earlier in the month. “This bill will eliminate the need for the department entirely by simplifying the tax code with provisions that work for the American people and encourage growth and innovation,” Carter made the statement in the press release. “Armed, unelected bureaucrats should not have more power over your paycheck than you do.”