US Politics

te on the Fair Tax // John Hinderaker

Since its inception, the Fair Tax has been a constant in conservative circles. It is a national sales and use tax that is meant to replace the income tax. The Fair Tax is a tax on consumption that encourages saving and investment. It is easy to administer, almost all states have a sales tax. It would also allow us to eliminate the IRS (or at least most of it), and end government surveillance of your financial affairs.

The problem with the Fair Tax, unlike the income tax is that it is not progressive. The federal income tax has become so progressive, that the upper income people pay the bill for the rest of us. The vast majority of Americans are either free riders or at best, reduced-fare passengers. This is unfair and even imprudent, in my opinion.

For obvious reasons, most people prefer progressivity. The Fair Tax is likely to be regressive. People with lower incomes and middle-incomes need to spend more than people with higher incomes, so they will have to pay a higher sales tax.

After years of being tossed around by conservative circles, the Fair Tax suddenly became relevant: House Republicans will bring it to a vote.

The House Republicans voted last night in favor of stripping the IRS of most the additional funding it received from the Democrats and Biden Administrations Inflation Reduction Act. ***

They’ve done more than that. They’ll also vote on a bill, which, if passed would abolish the IRS and eliminate the much-rejected income tax. Georgia Rep. Buddy Carter’s Fair Tax Act, which replaces the federal tax on income with a national consumption tax, and eliminates the IRS. It would also eliminate the federal income tax.

This is one concession made by House members who resisted electing Kevin McCarthy Speaker.

The House Freedom Caucus members who would not vote for him to become Speaker are now able to vote on the controversial and unlikely-to succeed bill.

The Fair Tax proposal is not unreasonable. If it could replace the federal income tax, I would be supportive. The VAT taxes, which are essentially sales taxes, are the main source of national revenue in Europe. However, the idea that Congress will abolish the progressive income tax to make way for a likely-regressive sales taxes is absurd.

You can do it, so bring it on. However, the Fair Tax will be seen in the media as another Republican giveaway to the wealthy, despite the fact that most of the rich are Democrats. This will not happen without a public relations campaign.

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