WASHINGTON – Three Democrats in the US House of Representatives have introduced a measure to challenge a controversial Republican tax proposal that would abolish the IRS, eliminate income taxes and impose a national sales tax.
House Republicans introduced the Fair Tax Act in January, shortly after House Speaker Kevin McCarthy, R-Calif. The legislation proposes to overhaul the US tax system by eliminating income tax in favor of a 23% to 30% tax on gross payments on taxable assets.
Democrats Wiley Nickel of North Carolina, Eric Sorensen of Illinois and Brittany Pettersen of Colorado called the measure “extremist.”
“I was dismayed to hear of an extremist plan by my colleagues across the aisle to introduce a 30% national sales tax for working families,” Nickel said at a news conference on Wednesday. “A 30% sales tax would be a disaster for working families and individuals in North Carolina and across the country who are already struggling with high gas prices, exorbitant housing costs, and rising costs for goods and everyday services.”
The three Democrats introduced a House resolution opposing a national sales tax for working families and instead supporting a tax cut benefiting middle-class families. Their efforts build on the work of Sens. Jon Tester, D-Mont., and Jacky Rosen, D-Nev., Nickel said.
Tester and Rosen brought in a free Senate resolution in February.
“We in the Heartland see a few things as defining how hard it is to live,” Sorenson said. “It’s the price of a gallon of milk, which was around $5 a gallon. And also the cost of eggs. It’s the cost of gas. We need to bring that cost down for ordinary Americans.”
“The last thing anyone needs now that we’re struggling to make ends meet is a tax hike,” he added.
Congress resolutions are not binding laws. They are instead used to highlight an important issue in Congress and to signal the direction the legislature intends to take when forced to vote on it.
Negotiations between McCarthy and members of the conservative House Freedom Caucus during McCarthy’s protracted bid to be Speaker of the House cemented a full House vote on the Fair Tax Act, according to Fox News. But McCarthy has yet to bring the bill up for debate.
“The idea that Republicans could even consider such a provision when their constituents are crying out for help is outrageous,” Pettersen said. Not only would this law have a negative impact on the people of Colorado and across the country, it would eliminate the IRS entirely.”
The bill would effectively repeal the US Constitution’s 16th Amendment, which gives Congress the power to set and collect income taxes. It would also abolish the IRS and impose a 30% tax on every $100 purchase, according to the nonpartisan Center for American Progress.
If passed, the tax policy would come into effect in 2025.
GOP lawmakers argue that a national sales tax on goods and services “bought for ultimate use” will encourage savings and investment, spur economic growth, raise living standards and protect taxpayers’ right to privacy compared to traditional federal income, payroll , respect estates and gift taxes, depending on the invoice language.
Rep. Buddy Carter, R-Ga., who introduced the Fair Tax Act, said the bill will simplify the tax code.
“Rather than adding 87,000 new agents to arm the IRS against small business owners and Central America, this bill will completely eliminate the need for the department by simplifying the tax code with provisions that work for the American people and encourage growth and innovation,” Carter said in a statement. “Armed, unelected bureaucrats should have no more power over your paycheck than you do.”
The law would reduce federal spending by over $71 billion in 2023, according to a report released Monday by the Congressional Budget Office. But it is estimated that it will also reduce tax revenues by more than $185 billion over the next 10 years.
According to the CBO, the GOP’s tax proposal would add $114 billion to the deficit over that period.
The bill will also undermine many of the tax provisions introduced by President Joe Biden as part of the Inflation Reduction Act, including more staff at the IRS and a 15% corporate tax imposed on companies earning more than $1 billion a year . In a January statement, Vice President Kamala Harris said the GOP is rushing to reverse this advance and allow too many millionaires, billionaires and corporations to cheat the system.
Pettersen said the sales tax would hit those who can’t save the most, such as seniors and low-income families.
“If you look at a consumer-oriented tax code, the people who can’t really save are paying disproportionate taxes, and the falling tax levels have a significant impact on Social Security and Medicare,” she said.
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2023-03-09 00:54:33
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