GOP aims at IRS over taxes
Yet, flat tax rate faces veto by Biden
A plan by Republican lawmakers which would see the IRS done away with entirely and the current tax system replaced by a flat consumer tax would apparently be vetoed by the president if it made it to his desk.
“These guys literally are proposing, unless they changed their mind again, proposing doing away with the IRS. Now, that sounds good, right?” President Biden said at a fundraiser in New York Tuesday evening, according to the White House.
“Except one thing: They want … to replace (it) with a 30% sales tax. A 30% sales tax, which — meaning somebody who’s a schoolteacher, a firefighter, or a cop would be paying more in taxes than you pay in this room, each one of you. Not a joke. And 30% sales tax — everything from your house to your car to your eggs that you purchase,” he continued.
Biden’s comments come after it was revealed Speaker of the House Kevin
McCarthy, as part of a package of concessions he agreed to in order to hold the Speaker’s gavel, would allow the Fair Tax Act to come to the House floor for a vote. McCarthy has since indicated he wants the proposal to go through committee first.
Introduced by the group Americans for Fair Taxation in the 90s, the plan would see the tax code replaced with a single sales tax charged at the point of sale, like most state’s sales taxes. The plan would also abolish the Internal Revenue Service and instead rely on the states to collect and remit the sales tax to the federal government.
Proponents say it is a fairer way of taxing the population, that it creates a “culture of savings,” and that it would provide “adequate funding for current and future national spending priorities.”
They also say that, despite Biden’s math, it’s a 23% tax.
Georgia Rep. Buddy Carter has introduced the plan to this Congress as H.R.25, or the Fair Tax Act.
“This bill imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income taxes, payroll taxes, and estate and gift taxes,” the bill reads, in part.
Opponents say the plan would equate to the worst form of inflation imaginable, rising the price of consumer goods by huge margins. Low and middle-income households would be hit hardest, they say, since those families spend a higher percentage of their income on essential goods.
Biden has vowed to veto the bill if it ever gets sent to him and, though it is unlikely it would clear the Democrat-controlled Senate, its potential appearance on the House floor marks a first for proponents of the plan.