Republican Tax Proposals Aren’t as Bonkers as They Sound
Abolishing the IRS is not a good idea, but a flat levy on consumption is a good starting point if the goal is to shrink the budget deficit.
What will Speaker of the House Kevin McCarthy propose on taxes?
Photographer: Anna Moneymaker/Getty Images
Among the many concessions Kevin McCarthy agreed to in order to become speaker of the House is one that would give the so-called Fair Tax Act a full hearing on Capitol Hill. To describe the bill as radical would be an understatement. Not only would it abolish the Internal Revenue Service, but it would also replace all existing federal taxes with a flat, nationwide 30% sales tax. That would be on top of existing state and local rates. Sure, the bill probably doesn’t have much chance of passing, but it has some merit and is a good starting point for a discussion about tax reform.
The bill’s handful of supporters — led by Representative Buddy Carter, a Georgia Republican — hope to spark a more general conversation about tax reform. Politically, most everyone outside the group of supporters calls it foolhardy. Legendary low-tax activist Grover Norquist described it as a gift to the Joe Biden administration. In policy terms, though, the underlying idea — a flat tax on consumption — is not as crazy as it sounds.