Republicans Split Over Proposal Implement To 23% National Sales Tax
The Fair Tax Act, proposed by Rep. Buddy Carter (R-Georgia), threatens to further factionalize Congressional Republicans.
The bill would replace income, payroll and estate taxes with a national tax of twenty-three percent.
The bill would abolish the Internal Revenue Service (IRS) by 2027. It is unclear if tax collection would be taken up by a different agency.
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Conservative tax activist Grover Norquist attacked the plan, arguing that it was a “political gift” to Democrats.
House Speaker Kevin McCarthy has agreed to allow the bill for a House vote. Allies of McCarthy, however, have indicated that the bill must still go through committee in regular order.
The non-partisan Institute of Taxation and Economic Policy (ITEP) think tank said that the tax would effectively be thirty percent on all goods.
Far-right politicians have long supported the Fair Tax Act. Among them are prominent Republican party leaders such as Ted Cruz, Mike Huckabee, John McCain, Rick Perry and Herman Cain. The bill was first introduced in 1999 and has been discussed in far-right circles ever since.
Democrats have vigorously attacked the Fair Tax Act ever since it was proposed. They criticize the tax as regressive, meaning that it has a substantially larger burden on low-income Americans than higher earners.
Allowing the Fair Tax Act for a floor vote was one of the many concessions that McCarthy was compelled to make to secure Republican support for his speakership bid earlier this month. Other concessions that McCarthy made to far-right members include “high profile” committee assignments, a one-member threshold to vote to replace the speaker of the House, more time for congressional staffers to read through potential legislation and a “promise” to divert funds from “safe” districts with moderate Republicans to more conservative Republicans in more competitive districts.
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