Biden assails GOP proposal to increase sales tax for middle class
Supporters of the so-called ‘fair tax’ proposal, which would raise the cost of consumer goods, include Republican Reps. Matt Gaetz and Marjorie Taylor Greene.
President Joe Biden on Monday criticized a proposal by Republicans in the House of Representatives that, if enacted, would implement a national sales tax on multiple goods, including groceries.
Biden mentioned the proposal during a speech at the National Action Network’s Martin Luther King Jr. Day breakfast at the Mayflower Hotel in Washington, D.C.
“They’re preparing to vote on a third bill. They want a national sales tax,” Biden said. “They want to raise taxes on the middle class by taxing thousands of everyday items from groceries, gasoline, clothing, and cutting taxes for the wealthiest, because they want to supplant the money lost from taxes on the millionaires and billionaires with a sales tax on virtually everything in the country.”
The proposed FairTax Act of 2023, introduced by Republican Rep. Buddy Carter of Georgia on Jan. 9, has so far attracted 23 Republican co-sponsors, including Marjorie Taylor Greene of Georgia and Matt Gaetz and Kat Cammack of Florida.
The legislation calls for the elimination of “current income taxes, payroll taxes, and estate and gift taxes,” which would be replaced by a national sales tax. It also calls for the elimination of the Internal Revenue Service.
Even if the bill passes the House, it is unlikely to pass in the Senate, which is controlled by a Democratic majority.
An analysis of the Republican proposal by the nonpartisan Institute on Taxation and Economic Policy found that the FairTax Act “would impose a 30 percent federal sales tax on everything we buy – groceries, cars, homes, health care, school tuition – and lead to a giant tax shift from the well-off to everyone else.”
The institute’s federal policy director, Steve Wamhoff, wrote that, if enacted, the bill would also eliminate current tax credits for middle-income earners, such as the Child Tax Credit and credits for insurance premiums charged under the Affordable Care Act.
A 2004 study conducted by the institute of a similar national sales tax proposal found that “replacing most federal taxes with a national sales tax would mean very large
tax increases on most Americans and very large tax cuts for the wealthy.”
House Republican leadership has not yet indicated a timetable for passage of the FairTax Act. In his speech, Biden said that if the bill passed Congress, he would veto it.
Legislative proposals from Republicans since taking control of the House have focused on policies that would benefit the wealthy, in contrast to their promises during the 2022 midterm election campaigns that they would combat inflation if they won a majority.
Recent economic indicators have shown an easing of inflation as costs for consumer goods decline. At the same time, Biden and Democrats in Congress enacted legislation aimed at lowering the costs of gas and other necessities, such as prescription drugs.
Published with permission of The American Independent Foundation.
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