Republicans’ tax plan would force Arizonans to pay more

House Republicans rolled out a tax proposal that replaces the current income tax system with a national sales tax. There are serious concerns with the Republican tax proposal as it will greatly increase the tax burden on those who can least afford it.

What is the “Fair” Tax Act?

H.R. 25, the Fair Tax Act is anything but fair.

It will impose a 30 percent tax on all goods and services nationwide, abolish all other federal taxes, and eliminate the progressive aspects of the tax system.

While this may sound appealing to some, this tax will add 30 percent to necessities like – groceries, rent, health care, and more – on top of state taxes. Items like milk and eggs, will be taxed at the same rate as sports cars and other luxury items.

Under the current progressive income tax system, someone with a lower income pays a smaller percentage of their earnings in taxes than those with higher incomes. The Fair Tax would eliminate this progressive system and impose a flat sales tax rate, meaning someone who makes $45,000 would pay the same on all goods and services as someone who makes $1 million a year.

To be clear: the Fair Tax is a regressive tax. It takes a larger percentage of low- and middle-class families’ money and allows the wealthy to keep more. It eliminates the credits and deductions given by our current system, and instead, offers a meager coupon, or prebate, to attempt to offset the negative impacts on working people.

All told, the Fair Tax will force lower-budget households to choose between lifesaving medicine or groceries, but for wealthy families, it’s a savings opportunity.

How does this impact Arizonans?

This plan will have a devastating impact on Arizonans, especially on our border communities.

Those with lower budgets or fixed-incomes, who are already struggling to make ends meet, will be hit the hardest. Families will pay more to keep the lights on and food on the table.

The “Fair Tax” was considered by the former Bush administration, which commissioned a study that found people making between $15,000 and $200,000 a year would see their taxes increase under the plan, while people making more than $200,000 a year would see more than a 7 percent decrease.

And in border communities like Yuma and Somerton, small businesses are still recovering from the pandemic and depend on cross-border tourism and commerce. With Mexican border crossers contributing between 60 to 70 percent of the sales tax revenue in Arizona border communities, this new Republican tax plan will deter visitors and threaten these local economies.

In Yuma and Somerton, the median household income is roughly $53,000. With most Arizonans just trying to get by, this Republican tax plan is regressive, radical and out-oftouch with the people who live here.

Republicans claim to be fiscally responsible, they’re not

While the cost of living continues to rise, Republicans aren’t focused on making life more affordable. Instead, they’re determined to give tax breaks to the wealthy, shift the tax burden to the middle class, and increase the deficit. They continue to threaten a government default that will force our nation into a recession if we don’t make cuts to vital programs like Social Security, Medicare, Medicaid, and more.

And we are seeing once again, House Republicans repeating history with continued fiscal irresponsibility while in power.

In 2017, during the Trump administration, the Republicans passed their same old trickle-down economics tax agenda which added a startingly $1.9 trillion to our debt to give tax cut to very wealthy and corporations.

With the Republicans back in charge of the House, the very first piece of legislation they passed was to eliminate IRS funding to crack down on wealthy tax cheats and add $114 billion to the deficit.

Economist William Gale ran the numbers and found that the Fair Tax would increase the deficit by $10.6 trillion over 10 years, and to avoid increasing the deficit, the Fairtax would have to be set to more than 64 percent.

Republicans brand themselves as fiscally responsible, and yet, each time they’re voted into office, they’re fiscally reckless.

Democrats offer a path forward for a fairer tax code

As House Democrats, we are fighting for a fairer tax code that will make wealthy individuals and corporations pay their fair share while giving tax relief and lowering costs for Americans.

Congressional Democrats authorized an enhanced Child Tax Credit in the American Rescue Plan that put money back in the pockets of working families and helped 92 percent of Arizona families with children. Instead of helping to reauthorize this critical tax credit, Republicans are seeking to impose a burdensome and punitive tax code that favors the few.

The fight over taxes could not be clearer: Republicans want to spend trillions to give the wealthiest and corporations a handout whereas Democrats want the wealthy to pay their fair share. We want to enforce the tax code on wealthy tax cheats and provide tax credits that help our communities, the middle class and struggling families.

It’s time Republicans stopped working to give tax breaks to the wealthy and worked across the aisle to find ways to make our current tax system fairer for working people and more equitable for all Americans.