It was a bit of a surprise to hear this month that new U.S. House Speaker Kevin McCarthy had agreed to hold a vote on the FairTax — the plan with deep Georgia roots that would replace federal income taxes with a national sales tax.
Since gaining notoriety almost 25 years ago — thanks to a book by former Georgia Rep. John Linder and Atlanta talk radio host Neal Boortz — the FairTax had gone nowhere, despite the inherent populist appeal of abolishing the IRS.
But members of the House Freedom Caucus — as part of their showdown with McCarthy over the post of Speaker — extracted a promise for a vote on the FairTax, which would levy a national sales tax of about 30 percent on all retail items.
Most Republicans don’t like it. And tax groups remain highly skeptical of the 132-page plan.
“It is regressive, more complex than its sponsors claim, and likely would reduce federal revenues,” the Tax Policy Center wrote.
The most interesting development was how the White House wasted no time ridiculing the FairTax, trying to make it a political millstone around the neck of every GOP lawmaker.
“It would raise taxes on the middle class by taxing thousands of everyday items from groceries to gas, while cutting taxes for the wealthiest Americans,” said President Biden, who issued a veto threat.
It’s not that Biden is worried about the FairTax becoming law. Instead, this was more of an easy opportunity to accuse Republicans of raising taxes on working Americans.
The response from FairTax supporters has been muted. Only two dozen Republicans have signed on, led by U.S. Rep. Buddy Carter, R-Pooler.
“No one likes paying taxes, but they much prefer a fair consumption tax over an income tax,” said Carter, who took the lead on the FairTax when Georgia Rep. Rob Woodall retired — Woodall had taken the baton from Linder.
But to many in the GOP, the idea is just plain dumb. Tax cut guru Grover Norquist called the FairTax ‘an assault on your retirement savings.’ Why? Because a sales tax would make everything more expensive for seniors.
FairTax supporters counter that Uncle Sam will send Americans a monthly check to help offset the sales tax — what’s known as a ‘prebate.’
“So everyone will be on welfare,” said Norquist.
Safely tucked away in retirement, Neal Boortz seemed in no mood to join the fight. But he made clear his displeasure with the FairTax attacks.
“So frustrating,” he wrote.
Outside of Georgia, the FairTax remains a hard sell. We’ll see if it really gets a vote in Congress.
Jamie Dupree has covered national politics and Congress from Washington, D.C. since the Reagan administration. His column appears weekly in The Atlanta Journal-Constitution. For more, check out his Capitol Hill newsletter at http://jamiedupree.substack.com
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