House Democrats push back on GOP bill to abolish IRS and sales tax
Rep. Brittany Pettersen (D-CO), Rep. Wiley Nickel (D-NC) and Rep. Eric Sorensen (D-IL) holds a news conference outside the US Capitol on March 8, 2023 in Washington, DC.
Drew Angerer | Getty Images
WASHINGTON – Three House Democrats have introduced a measure to counter a controversial Republican tax proposal that would repeal the IRS, eliminate income taxes and impose a national sales tax.
House Republicans introduced the Fair Tax Act in January, shortly after Rep. Kevin McCarthy, R-Calif., was voted in as speaker. The legislation proposes to overhaul the US tax system by eliminating the income tax in favor of a 23% to 30% tax on gross payments for taxable property.
Democratic Reps. Wiley Nickel of North Carolina, Eric Sorensen of Illinois and Brittany Pettersen of Colorado called the move “extremist.”
“I was shocked to hear about an extremist plan from my colleagues across the aisle that calls for a 30% national sales tax on working families,” Nickel said at a news conference 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, high housing costs and rising commodity costs. and daily services.”
The three Democrats introduced a House resolution opposing a national sales tax on working families and instead supporting a tax cut to benefit 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 introduced a Senate companion resolution in February.
“We at heart, we see some things like determination how hard it is to live,” Sorenson said. “It’s the price of a gallon of milk, which has been about $5 a gallon. And also the cost of eggs. It’s the cost of gas. We have to lower those costs for ordinary Americans.”
“The last thing anyone needs right now, while we’re struggling to make ends meet, is increased taxes,” he added.
Congressional resolutions are not binding laws. They are used, instead, to highlight an issue of importance in Congress and signal the direction lawmakers plan to take if forced to vote on it.
Negotiations between McCarthy and members of the conservative House Freedom Caucus during McCarthy’s long bid for House speaker cemented a full House vote on the Fair Tax Act, according to Fox News. But McCarthy has yet to bring the bill to the floor for debate.
“The idea that Republicans might even consider such a provision when their constituents are crying out for help is outrageous,” Pettersen said. Not only would this bill have negative impacts on people in Colorado and across the country, it would completely eliminate the IRS.”
The bill would effectively repeal the 16th Amendment to the US Constitution, 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 in purchases, according to the nonpartisan Center for American Progress.
If approved, the tax policy will take effect in 2025.
GOP lawmakers argue that a national sales tax on goods and services “purchased for final consumption” will spur savings and investment, spur economic growth, raise living standards and respect taxpayers’ right to privacy as opposed to traditional federal income, payroll, estate and property and gift taxes, according to the bill’s language.
Rep. Buddy Carter, R-Ga., who introduced the Fair Tax Act, said it would simplify the tax code.
“Instead of adding 87,000 new agents to arm the IRS against small business owners and middle America, this bill will eliminate the need for the department entirely 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 act would cut federal spending by more than $71 billion in 2023, according to a report released Monday by the Congressional Budget Office. But it is also estimated to reduce tax revenue by more than $185 billion over the next 10 years.
The GOP tax proposal would add $114 billion to the deficit over that time period, according to the CBO.
The bill would also gut many of the tax provisions introduced by President Joe Biden under the Inflation Reduction Act, including more staff at the IRS and a minimum corporate tax of 15% imposed on companies earning more than $1 billion a year. In a January statement, Vice President Kamala Harris said the GOP is “rushing to undo that progress and allow too many millionaires, billionaires and corporations to cheat the system.”
Pettersen said the sales tax would hurt those who are unable to save the most, such as the elderly and low-income families.
“When you look at a consumer-driven tax code, it’s the people who aren’t able to actually save who pay a disproportionate level of taxes, as well as the tax rate that goes down significantly impacting Social Security and Medicare,” she . said.