Republicans are trying to distance themselves from the national sales tax plan. Too late
House Republicans are once again—or is it still?—in disarray, as one after another of the promises Kevin McCarthy made in his quest to eke out the votes needed for speaker comes due. McCarthy’s pledge that the “Fair Tax” would at least go to committee is Republicans’ latest self-inflicted wound. Poor babies. Governing is so difficult for them.
The Fair Tax, a national sales tax replacing the federal income, payroll, and estate taxes and abolishing the IRS, is such a terrible idea that even many Republicans oppose it, and Republican leaders, McCarthy included, realize that promoting it in any way hands Democrats a potent weapon. But McCarthy is such a weak leader that the only way he could drag himself over the finish line to speaker was to make this kind of promise, and now he has to live with the results.
The results? Republicans associating themselves with a bill that would lower taxes for rich people and raise them for middle-class people by eliminating the federal income tax only to put a 30% additional tax on literally every purchase. A 2011 Tax Policy Center analysis of an earlier version of this plan concluded that it would “reduce the tax burden for the top 1 percent (who make an average of $1.6 million per year) by a stunning 40 percent.”
House Republicans, other than the ones pushing the bill, the ones who leveraged their speaker votes into a pledge from McCarthy—who does not himself support it—that it would go through the committee process understand that this is politically toxic.
“There’s never going to be a vote for it,” Republican Rep. David Schweikert told Politico. “I have no opinion yet,” said Rep. Carol Miller. Nice try, guys, but even if there isn’t a vote in the end, your party still owns it, not just because of the far-right lawmakers who support the bill but because they got enough power in the party to get legislation like this onto the agenda.
How toxic is this bill? You may remember Republican anti-tax zealot Grover Norquist as the guy who said: “My goal is to cut government in half in twenty-five years, to get it down to the size where we can drown it in the bathtub.” But Norquist and his organization, Americans for Tax Reform, are blasting the Fair Tax.
”A small minority of House Republicans may force a vote on the creation of a national sales tax,” Norquist wrote at The Atlantic last week. “This will needlessly give Democrats a political cudgel in exchange for a flawed bill with no hope of passing.”
One of Norquist’s objections to the bill is the provision that lead its chief sponsor, Rep. Buddy Carter, to call it “the only progressive tax reform bill currently pending before Congress.” Namely, “Each household will receive a monthly prebate based on federal poverty levels and household size that will allow families to purchase necessary goods, such as food, shelter, and medicine, essentially tax-free. This is similar to our current individual exemption and refundable tax credit system.” To Norquist, “In all but name, in fact, the Fair Tax’s ‘prebate’ system would establish a universal basic income, one of the left’s favorite policies.” And yet somehow the left does not like this bill.
The Republican who say the Fair Tax won’t get out of committee are almost certainly right. But the Republican Party cannot fully distance itself from a bill that has hung around getting support from significant numbers of Republican lawmakers for decades. Most of all, though, this once again shows how pathetic McCarthy is. To get the résumé line he’d dreamed of, he was willing not only to sacrifice his own effectiveness and power in that role but to once again publicly link Republicans with a disastrous policy.
The extremist Republicans of the House are one problem for their party. The fact that the party’s so-called leaders have allowed the extremists to take control is a bigger problem. And they get no sympathy whatsoever.
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