With Kevin McCarthy holding the gavel in the House of Representatives, it’s anything goes time in that body. (Given how tenuous McCarthy’s hold on that gavel is what with all the Freedom Caucus hands all over it, actually calling him “speaker” is questionable.) There is no right-wing proposal too wacky to make it to the House floor. Case in point: The Fair Tax Act, which is getting its first floor vote ever as part of the deal McCarthy made with the maniacs to end their opposition to his promotion.
The very first bill Rep. Earl “Buddy” Carter filed when he came to Congress in 2015 was this bill, which he picked up from his predecessor in Georgia. It’s been floating around the GOP for more than 20 years, but this is the first time GOP leadership has agreed to give it a floor vote. Because this is the first time GOP House leadership had to promise the world to all and sundry to actually get their jobs. And because this is the first time the GOP leadership have been completely nihilistic numbskulls. So a bill to abolish the Internal Revenue Service (IRS), eliminate the tax code, replace income taxes, payroll taxes, and estate and gift taxes with a 23% national sales tax is going to the floor.
By the way, it doesn’t just abolish the IRS, though that’s the only thing spelled out in the text. It threatens Social Security and Medicare, which run on payroll taxes. The bill would allocate the proceeds from the sales tax to “(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,” but ends the dedicated funding source for the programs in the future. When all the functions of government are coming from one pot of money and social insurance programs have to compete with defense for money, guess what gets sacrificed?
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It also means a big regressive tax hike on low- and middle- income families, as President Joe Biden’s Chief of Staff Ron Klain tweeted. “New GOP plan: eliminate income tax on the rich, giant national sales tax on all middle class families.” It has a “monthly tax rebate” that’s supposed to go back to people “based upon criteria related to family size and poverty guidelines,” but there won’t be any IRS to figure out how to get that money back to people, so it puts the onus onto the states to administer. That would be an “unfunded mandate” in conservative speak.
Also, no tax code means no deductions for donations to charity, which means lots of nonprofits disappear. Which means a great deal of assistance to the nation’s most vulnerable people disappears. But of course there are plenty of protections for rich people to get out of even paying this tax: “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.”
The wackiest part? It includes a time bomb that sets the nation up to have zero revenue in 2030. Zero dollars going to federal coffers, with this provision: “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.” No permanent repeal of the income tax, no tax at all.
And it’s getting a floor vote. Because of Kevin McCarthy’s desperate need to be called speaker. Because the GOP of 2023 has no clue how any of this works.
The bill, if it passes in the House, will get laughed out of the Senate and has no hope of passing. Which makes it a poison pill for the not-maniacs in the House GOP. One of the other reasons it’s never advanced to the floor is that leadership never wanted to force their members to have to vote on something so ridiculous, a vote that could either alienate the core Tea Party base on the one hand or their corporate funders on the other. Business does not like this idea.
So thanks Kevin for yet another gift to Democrats in 2024.