House Republicans will reportedly not get the chance to vote on the Fair Tax Act, a bill introduced by Rep. Earl L. Buddy Carter (R-GA) and intended to eliminate the Internal Revenue Service along with all personal and corporate income taxes, the death tax, gift taxes and payroll taxes.
What Happened? New House Speaker Kevin McCarthy told reporters he does not support the Fair Tax Act, a decision that effectively kills the bill, according to Axios.
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The Fair Tax Act was part of a deal McCarthy struck with conservative Republican House members to secure his speakership. However, without the support of Democrats, McCarthy or several other Republican House members, the bill will likely not make it out of the Ways and Means Committee, which has jurisdiction over issues involving taxes.
Why It's Important: The Fair Tax Act would eliminate the complicated federal tax system and individual income tax return filings and replace current federal income taxes with a national 23% sales tax starting in 2025. The new federal sales tax would be collected by individual states, and monthly tax rebates would be provided based on poverty rate and family size.
"Theres no appetite to do a 23% or 25% sales tax on all goods purchased, or maybe higher," Rep. Don Bacon (R-NE)told C-SPAN this week.
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Benzinga's Take: Fair Tax Act legislation has been around in one form or another since 1999, and the latest effort to push the legislation forward seems like it was mostly for show. Even with full Republican support, the legislation would be dead upon arrival in the Democrat-controlled Senate.
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