GOP tax plan denounced as ‘one of the most regressive proposals in a generation’

Unveiled earlier this month by Rep. Buddy Carter (R-Ga.), the Fair Tax Act is hardly a novel piece of legislation. As Steve Wamhoff of the Institute on Taxation and Economic Policy noted in a recent blog post, the bill has its origins in a proposal “initially pitched by an organization created by the Church of Scientology during its dispute with the IRS over whether it constituted a church and was thus tax-exempt.”

“The Church of Scientology’s only goal in the matter was to eliminate the agency causing it trouble, and lost interest once the IRS threw in the towel and allowed it to present itself as a church,” Wamhoff explained. “But by then several politicians had bought into the idea and introduced it as legislation, which has been reintroduced in each Congress since as the Fair Tax.”

Carter’s legislation, which currently has nearly two dozen House GOP co-sponsors, would abolish the IRS—a major gift to wealthy tax cheats—and eliminate the payroll taxes that finance Medicare and Social Security. The bill would also nix the individual income tax, the corporate income tax, the estate tax, and other taxes, establishing in their place a sales tax of 30% for calendar year 2023.

“The GOP’s so-called ‘Fair Tax’ proposal is one of the most regressive proposals in a generation, imposing a 30% federal sales tax on everything Americans buy from gas to food,” said former U.S. Labor Secretary Robert Reich. “There’s nothing ‘fair’ about it. It would punish the poor and middle class while helping the rich.”

In an attempt to offset the inherent regressivity of the sales tax, Carter’s bill would send most U.S. households a monthly “prebate” to help families cover the costs of basic necessities—effectively replacing the Earned Income Tax Credit, the Child Tax Credit, and other existing tax benefits that the measure would eliminate.

But Wamhoff argued the prebates would not be “nearly enough to offset the financial hit most Americans would face from the new national sales tax.”

Democratic lawmakers and President Joe Biden have wasted no time seizing on the tax proposal as further evidence of the Republican Party’s commitment to delivering huge windfalls to the rich.

“The GOP wants to scrap the income tax and replace it with a 30% sales tax,” tweeted Rep. Pramila Jayapal (D-Wash.), the chair of the Congressional Progressive Caucus. “In WA State, where we have no income tax and rely on sales and excise taxes, the poorest families spend 17% of their income on taxes. The wealthiest spend 3%. This effort is a tax cut for the rich, period.”

With Democrats in control of the Senate and the White House, the Fair Tax Act has no chance of becoming law, and Rep. Kevin McCarthy (R-Calif.) only agreed to allow hearings on the legislation as part of the speakership deal he struck with far-right GOP holdouts.

But progressives argued the proposal offers a telling glimpse into the Republican Party’s extreme economic priorities at a time of skyrocketing inequality, large-scale corporate tax avoidance, and economic hardship for poor and middle-class households.

Originally published at Commondreams.org.