A group of staunch conservatives in the House is pushing for a vote on a bill that would eliminate federal income taxes and the IRS, but some influential Republicans are pushing back on what appears to be a political underdog for the GOP.
The bill, known as the Fair Tax Act, would eliminate all personal and corporate income taxes by imposing a 30% national sales tax on goods and services to be collected at the state level, thus eliminating the need for the IRS .
In a deal to support Speaker Kevin McCarthy (R-CA) in his race for the leadership of the House, conservatives reportedly won a pledge to bring the tax bill to the floor for one vote. However, the bill has virtually no chance of becoming law and in the meantime it has provided President Joe Biden and Democrats with new ammunition in their attempt to paint Republicans as extremists.
“This ‘Fair Tax Act’ is really disgusting stuff,” Senate Majority Leader Charles Schumer (D-NY) said Thursday. “The Republican tax plan would raise the cost of buying a home by $125,000. It would increase the cost of buying a car by $10,000. It would raise the average grocery bill by $3,500 a year at a time when people are already concerned about the high price of groceries. How can they do that?”
Schumer did not note that the bill would also eliminate income and other taxes, but his remarks highlight the difficulties Republicans could face if they move forward with the bill. Analyzes of similar tax plans show that a national sales tax would be regressive, raising taxes on the poor and reducing taxes on the rich, without providing enough revenue to fund the full range of government activities.
Several Republican leaders have spoken out against the bill. McCarthy said earlier this week that he objects, while admitting he could be considered if he passes the committee process. House Majority Leader Steve Scalise (R-LA) also said he did not support the bill, instead preferring to make the tax cuts included in the 2017 tax bill permanent.
Rep. Don Bacon, a relatively moderate Republican from Nebraska, told The Hill that he opposes the bill. “I don’t think it’s wise,” he said, adding that he doesn’t think “it’s policy or smart policy.”
Rep. Jason Smith (R-MO), the new chair of the Ways and Means Committee who calls himself a “firebrand,” said he plans to look into the Fair Tax plan but stopped short of supporting it. “We will have a public and transparent hearing on that matter and see where it goes from there,” he said.
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