Democrats Slam GOP Plan to Impose National Sales Tax

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WASHINGTON, D.C. — A handful of House republicans are proposing getting rid of federal taxes, even the IRS and instead, have a national sales tax. The idea is getting backlash from democrats.

It’s called the “Fair Tax Act of 2023’”. According to the legislation, it would get rid of things like income tax, estate and gift tax and instead, impose a national sales tax of 23 percent.

But an economist with the Tax Foundation, which is an independent tax policy nonprofit, explain people would be paying more like 30 percent because the 23 percent rate is “tax inclusive”.

They tell me if enacted, lower and middle class families will be the ones impacted the most by this. They also add this national sales tax would not raise enough revenue to cover the sources of federal taxes that it would eliminate.

Economists said estimates indicate it would take a rate of at least 44 percent rather than proposed 30 percent to get close to raising the same amount of revenue as the current tax system does.

Senator Chuck Schumer (D- NY) is slamming the proposal. Calling this idea “crazy” and said if enacted, he believes it would plunge us into the next great depression.

“So this plan is dangerous, it’s a disaster,” said Sen. Schumer. “It would impact almost every single American family for the worst.”

“Under this sales tax if you spent one dollar on something it would face a 30 percent tax so you would owe 30 cents of tax on the one dollar you spend,” said Erica York, an economist with the Tax Foundation. “In terms of how that dollar differs. Lower income households and middle-income households tend to consume a larger portion of their income than higher income households and so that’s why they would see a relatively larger tax burden. A larger income household has more income, they don’t spend as much of it they have more they can save and can so by saving, they would not face this sales tax.”

Those supporting this legislation argue that there wouldn’t need to be an IRS anymore and argue this would simplify the tax code.


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