United States government officials announced on January 10 The FairTax Act, a bill introduced by Rep. Buddy Carter of Georgia, called for significant adjustments to the U.S. federal tax code.
Social media users, however, claim that the 30% national sales tax included in the bill—also known as a “consumption tax”—would be bad for the middle class and lead to the IRS’s abolition. People were looking up what the consumption tax would do, according to Google Trends data.
According to the proposed legislation, federal income, payroll, estate, and gift taxes would all be eliminated. Taxes on corporate profits and capital gains would also be eliminated. These taxes would be replaced with a national sales tax of 23 percent.
A national sales tax would increase the cost of all goods and services for Americans. The bill states that eligible households could receive a rebate, a monthly cash allowance for households that are below the federal poverty level, to help with this increase in cost.
The bill states that no funds collected from sales taxes would be managed or collected by the IRS. The funds would be handled by the Department of Treasury.
According to an article published by Verify on January 23, 2023, the Department of Treasury would establish an Excise Tax Bureau and a Sales Tax Bureau to oversee all taxes gathered at the state and federal levels. Because the Treasury Department would be in charge of management and enforcement, this would make the IRS obsolete. By adding 87,000 new agents, the IRS is not stepping up its audits of middle-class households.
The House Ways and Means Committee will be reviewing the bill. President Joe Biden said he wouldn’t sign the bill even if it passes the House and the Senate.