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Fair Tax Act

Ranb

Penultimate Amazing
Ranb
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House Republicans to vote on bill abolishing IRS, eliminating income tax

https://www.foxnews.com/politics/house-republicans-vote-bill-abolishing-irs-eliminating-income-tax

Republicans in the House of Representatives will vote on a bill that would abolish the Internal Revenue Service (IRS), eliminate the national income tax, and replace it with a national consumption tax.

Fox News Digital has learned that the House will be voting on Georgia Republican Rep. Buddy Carter's reintroduced Fair Tax Act that aims to reel in the IRS and remove the national income tax, as well as other taxes, and replace them with a single consumption tax.

The vote on the bill was made as part of the deal between House Speaker Kevin McCarthy, R-Calif., and members of the House Freedom Caucus and was pushed forward in his quest for the gavel.
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All I could find online was a 2021 bill from the 117th Congress.

Summary: H.R.25 — 117th Congress (2021-2022)
https://www.congress.gov/bill/117th-congress/house-bill/25?r=96&s=1

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 rate of the sales tax will be 23% in 2023, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property; for property or services purchased for business, export, or investment purposes; and for state government functions.

Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.

The states have the responsibility for administering, collecting, and remitting the sales tax to the Treasury.

Tax revenues are to be allocated among (1) the general revenue, (2) the old-age and survivors insurance trust fund, (3) the disability insurance trust fund, (4) the hospital insurance trust fund, and (5) the federal supplementary medical insurance trust fund.

No funding is authorized for the operations of the Internal Revenue Service after FY2025.

Finally, the bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this bill.
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https://en.wikipedia.org/wiki/Consumption_tax#Tax_burden_of_consumption_tax

Consumption taxes are often criticised to be regressive, meaning the average tax rate decreases with increasing income. However, it depends on income measurement. If income is measured annually or monthly, consumption taxes are truly regressive, as higher-income individuals can afford to save more, thus reducing the tax base for consumption tax more significantly than lower-income individuals. But if lifetime income is used to measure the ability to pay, the burden tends to be more equitable as over a lifetime, lifetime consumption is a good approximation of lifetime income.
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What are the odds that the GOP will make sure this benefits the rich more than it does the lower and middle class?
 
Won't pass the Senate of course, but in the event that the House does pass this bill, it raises the specter of what would happen if they controlled the Senate as well.
 
Ranb said:
What are the odds that the GOP will make sure this benefits the rich more than it does the lower and middle class?
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It does on its face.

It totally ignores the idea that tax policy aimed at eliminating massive accumulation of wealth isn't as much about revenue as it is preventing massive accumulation of wealth in and of itself as a danger to society. It eliminates the estate tax and removes any apparatus to tax the ultra-wealthy.

It will also still require an IRS to function. The provision about paying people based on poverty level and income. There will be the same whack-a-mole loophole cops and robbers game we have now. They will make things exempt for policy reasons and rich people and corporations will still pay lawyers a ton of money to dream up ways to pervert them.

That's before we get to the idea that a dollar is not always worth a dollar. That taxing a poor person and a rich person at the same rate is not equitable because from the perspective of the person every extra dollar means more to the poor person.
 
Wouldn't this type of a swap in taxation focus cause a massive inflation spike? I can see some individual rich guys wanting this but in general this would slaughter the economy and consumer market businesses or am I just missing the magical economic genius in this?
 
Consumption taxes are really quite common around the world, including the capitalist dystopias of Europe.

This will not pass but it is not obviously a bad idea.

Clearly a few democratic voters aren't thinking beyond, GOP bad.
 
ahhell said:
Consumption taxes are really quite common around the world, including the capitalist dystopias of Europe.

This will not pass but it is not obviously a bad idea.

Clearly a few democratic voters aren't thinking beyond, GOP bad.
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Eh, it's worth discussion (and I think it has been discussed quite a bit on this forum), but it is a major change coming out of nowhere (I am not aware of any GOPer campaigning on it), and will almost certainly heavily favor the wealthy at a time when it is pretty clear the wealthy already have too much money.
 
ahhell said:
Consumption taxes are really quite common around the world, including the capitalist dystopias of Europe.

This will not pass but it is not obviously a bad idea.

Clearly a few democratic voters aren't thinking beyond, GOP bad.
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Most states already have a sales tax. It is common here already.

I don't think assuming that the merits of a federal consumption tax would be besides the point when the people proposing it have such a bad faith history of wanting to do anything to assist the wealthy and starve the government of funding.

Eliminating the IRS and the estate tax is the tell here. There is no reason to do that and it's lunacy to assume that the feds wouldn't need an entity to oversee tax.
 
ahhell said:
Consumption taxes are really quite common around the world, including the capitalist dystopias of Europe.

This will not pass but it is not obviously a bad idea.

Clearly a few democratic voters aren't thinking beyond, GOP bad.
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And they all have income taxes as well. Imagine the UK/EU countries being 100% funded via VAT. What rate would be required?
 
In the UK, this is VAT. In Australia, it is GST. Other names/acronyms in other countries. In the USA, you pay federal, state and even local sales taxes already. So this legislation is boosting these taxes while eliminating income and payroll taxes? Do they understand stagflation?
 
Norman Alexander said:
In the UK, this is VAT. In Australia, it is GST. Other names/acronyms in other countries. In the USA, you pay federal, state and even local sales taxes already. So this legislation is boosting these taxes while eliminating income and payroll taxes? Do they understand stagflation?
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No, their understanding of economics is at a grade school level if that.
 
lobosrul5 said:
No, their understanding of economics is at a grade school level if that.
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Mine is less than that. I'm not an economist's bootlace. But even I can see that boosting sales taxes greatly will lead to hoarding and the stalling of the economy.

It will also lead to a huge increase in tax-avoidance schemes such as the non-monetary barter economy. A variant will be conducting online sales in non-taxable regimes (i.e. outside the USA). Of course, legislation and a government tax police force will need to be formed to combat that and collect the revenue due... ;)
 
Norman Alexander said:
Mine is less than that. I'm not an economist's bootlace. But even I can see that boosting sales taxes greatly will lead to hoarding and the stalling of the economy.

It will also lead to a huge increase in tax-avoidance schemes such as the non-monetary barter economy. A variant will be conducting online sales in non-taxable regimes (i.e. outside the USA). Of course, legislation and a government tax police force will need to be formed to combat that and collect the revenue due... ;)
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You would think they'd chase down sales outside of the country if you bring a product back into the US but with no IRS or equivalent, I guess not. That states are supposed to enforce it... what would their motivation be for that?

Someone very wealthy would absolutely love this system. Buy rental properties, no tax on gains... bet they still let them deduct mortgage interest. After a few years, quit your job and move somewhere with a low usage tax.

ETA: I went to their website and read up on it... the only, and I mean the only thing good that I can kind of see is, right now the federal gov gets nothing from visitors coming to the USA. Other countries get VAT money paid by tourists... of course our states and localities do but its not spread around evenly.

ETA2: other parts... just how ******* dumb is this :"Everyone Pays Their Fair Share

Tax evasion and the underground economy cost each taxpayer an additional $2,500 every year! But by taxing new products and services consumed, the FairTax puts everyone in the country at the same level at the cash register. Further, only legal residents are eligible for the prebate. Learn more ."

Right, I'm sure everyone conducting illicit transactions will pay their 23%!
 
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This will never get past the Senate and Biden's desk, but I'm sure there's millions of ********* out there who are all for this but will be among the people hurt by it. The GQP is the party of "teh stoopid."
 
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