Tuesday, February 14, 2023

The GOP's "Fair Tax" Bill Is Not Fair At All


 The following is part of an op-ed by Natasha Sarin in The Washington Post:

FairTax is rooted in the interests of the most privileged. In fact, it is the brainchild of three Houston entrepreneurs — Leo Linbeck Jr., Jack Trotter and Bob McNair, the former owner of the National Football League’s Houston Texans. The trio, who have all now passed away, raised millions in the late 1990s— much of it their own seed funding — to build a grass-roots movement for their policy.

FairTax proponents say it would simplify the system by eliminating income taxes and allowing Americans to keep everything in their paychecks. In reality, replacing the income tax system with a national sales tax shifts the tax burden to lower-income households and benefits higher-income ones.

The economics are simple: Wealthier households spend a smaller shareof their income than poorer households do, which means lower- and middle-income taxpayers would take on more of the overall tax burden. If Treasury Department estimates from 2005 — old, but directionally still accurate — reflected the distribution of taxes today, the bottom 50 percent of taxpayers would pay more than twice as much tax this year — roughly an extra $220 billion — under FairTax. The top 1 percent would pay about $320 billion less.

FairTax won’t die, despite its legion of detractors. Since 1999, it has been introduced in every Congress. And although most mainstream Republicans have moved away from public support of FairTax in recent years, it actually has some renewed momentum: It is on track for its first-ever floor vote, has spent weeks atop the list of most viewed bills this Congress, and could well be a campaign issue for Republicans in the 2024 cycle, given that many potential presidential nominees — including Ron DeSantis, Nikki Haley and Mike Pence — are past champions.

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