A group of conservatives in the House of Representatives are pushing for a vote on a bill to eliminate federal income taxes and the IRS, but some influential Republicans are pushing back on what appears to be the enemy. political defeat to the GOP.
The bill, called the Fair Tax Act, would eliminate all personal and corporate income taxes while imposing a 30% national sales tax on goods and services that would be collected at the state level. state, thus eliminating the need for the IRS.
In a deal to back Speaker Kevin McCarthy (R-CA) in the House leadership race, conservatives are said to have won a pledge to put the tax bill on the floor for a vote. However, the bill has little chance of becoming law and in the meantime has provided President Joe Biden and Democrats with new weapons in an attempt to brand Republicans as extremists.
“This ‘Fair Tax Act’ is really bad stuff,” Senate Majority Leader Charles Schumer (D-NY) said Thursday. “The Republican tax plan would increase the cost of buying a home by $125,000. It will increase the cost of buying a car by $10,000. It will increase your average grocery bill by $3,500 a year at a time when people are already worried about high grocery prices. How can they do this?”
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 push the bill. Analysis of similar tax plans shows that the national sales tax would be regressive, increasing taxes on the poor and lowering taxes on the rich, while not providing enough revenue to finance the entire government activities.
Several Republican leaders have come out against the bill. McCarthy said earlier this week that he opposes it, while allowing that it could be brought up for review if it passes the committee’s process. House Majority Leader Steve Scalise (R-LA) also said he doesn’t support the bill, instead wanting to make permanent the tax cuts contained in the 2017 tax bill.
Representative Don Bacon, a relatively moderate Republican from Nebraska, told The Hill he opposes the bill. “I don’t think that’s a wise thing,” he said, adding that he doesn’t think “it’s politics or smart policy.”
Representative Jason Smith (R-MO), the new chairman of the Ways and Means Committee, who calls himself a “fireman,” said he plans to consider the Fair Tax plan but does not support it. it. “We’re going to have a public, transparent hearing on that and we’ll see where it goes from there,” he said.