When Georgia U.S. Rep. Buddy Carter announced earlier this month that he had reintroduced legislation to create a national sales tax replacing the federal income tax, he didn’t expect it to become the latest political hot potato in Washington.
It’s the same language that Carter introduced to little fanfare in the previous congressional session. And the tax proposal, which Republicans call a “fair tax,” is the same plan various conservatives have backed for more than two decades.
But the difference this year is that House Speaker Kevin McCarthy promised to give the bill attention — at least a vote in committee — as part of his deal with far-right lawmakers who initially blocked his ascension to speaker.
The news that the sales tax legislation could make it to the House floor has drawn criticism from Democrats, including President Joe Biden. In a speech Thursday in Virginia, he criticized Carter’s legislation by saying it was part of a dangerous economic agenda pushed by congressional Republicans.
“They want to impose a 30% national sales tax on everything from food, clothing, school supplies, housing, cars,” the president said. “The whole deal: 30%. You think I’m joking. If I didn’t see it, I wouldn’t believe it.”
Biden pledged to veto any such legislation if it reaches his desk.
“This nation has gone through too much and come too far to let that happen,” he said. “I will not let it happen, not on my watch.”
But it’s not just Democrats who are cold to Carter’s bill. Even McCarthy himself has said he’s not in favor of the legislation.
Speaker Kevin McCarthy told me he opposes a bill called the Fair Tax Act, a controversial GOP proposal to repeal federal taxes and set a national sales tax at 30 percent.
— Manu Raju (@mkraju) January 25, 2023
“No,” he said pic.twitter.com/CpshZj7dBK
Carter, a Republican from Pooler, said he welcomes the discussion and wants input on how to make his proposal more palatable for lawmakers.
“I came up here to give big ideas and to change the status quo,” he said. “I understand the reservations, but I invite them to help me make the bill even better. A closed mind is a dead mind.”
The tax proposal was first introduced by Georgia U.S. Rep. John Linder in 1999. Fellow Republican Rob Woodall, also of Georgia, took the lead in 2010 after Linder retired. It was the first bill that Carter co-sponsored when he took office in 2015, and he became the primary sponsor after Woodall’s 2020 retirement.
Carter has spent the past few days talking to fellow Republicans about the legislation and answering their questions. His office has created fact sheets that are passed out at GOP meetings, and his congressional website now has a “myth vs. fact” post on his plan.
The federal sales tax rate would be 30%, but the bill would require it to be included in the overall price of goods instead of as a separate line item. Low-income families would also receive tax credits or rebates to reduce their overall tax burden.
State and local taxes would continue to be an additional charge on receipts. For instance, in Atlanta that would add nearly 9% to the final cost.
Carter said he is confident that the more people learn about the proposal, which includes monthly “prebates” intended to offset the impact of the sales tax on low-income families, the more support it will receive. And he believes the bill can pass in the House.
“I think the chances are good once people understand just how fair it is and how American taxpayers are fed up with this,” he said. “They’re fed up with being harassed by the (Internal Revenue Service). They want to control their taxes. This gives them control over their paycheck.”
No matter what, however, the bill is dead on arrival in the Senate, where Democrats are in control. Senate Leader Chuck Schumer made that clear Wednesday.
“As long as I am majority leader,” he said, “this devastating, unfair, nasty and almost crazy plan is not going to pass.”
About the Author
