There’s still some mystery surrounding House Speaker Kevin McCarthy and his private deals with his own members. We know the California Republican reached some striking agreements with many of his far-right members in order to get his gavel, but the details are unfolding slowly.
Take, for example, an upcoming vote on a so-called “fair tax.” Semafor reported this week:
As part of his deal to become House speaker, Kevin McCarthy reportedly promised his party’s conservative hardliners a vote on legislation that would scrap the entire American tax code and replace it with a jumbo-sized national sales tax. The assurance got relatively little attention at the time, drowned out by the many other concessions McCarthy made to win his gavel. But with Democrats already attacking the proposal, some conservatives see it as a political headache in the making.
For those unfamiliar with the idea, the tax proposal is a doozy, even by GOP standards. The plan, championed by Republican Rep. Buddy Carter of Georgia, calls for scrapping effectively all federal taxes — income taxes, corporate taxes, Social Security payroll taxes, estate taxes, et al. — and permanently shuttering the Internal Revenue Services.
And how, pray tell, would the federal government replace all of that revenue and fund federal operations? Through a massive national sales tax, also known as a consumption tax.
If the idea sounds at all familiar to readers of a certain age, there’s a reason for that. Some far-right media personalities talked up the plan in the 1990s, and it found a few prominent Republican proponents in the years that followed. Texas’ Rick Perry expressed support for the idea in a book he wrote in 2010, for example, and Arkansas’ Mike Huckabee endorsed a related plan as part of his ill-fated 2016 presidential campaign.
Now, evidently, it’s back — and Democrats couldn’t be more pleased.
It’s not that Democrats think a national sales tax is a good idea. Rather, Democrats are delighted that this plan will get a vote in the Republican-led House because the party is eager, almost desperate, to treat the bill like a pinata.
“Hold on,” Sen. Elizabeth Warren of Massachusetts wrote on Twitter yesterday. “House Republicans want a national 30% sales tax on everything from groceries to gasoline? They want to raise taxes on working-class [and] middle-class families while slashing them for millionaires [and] billionaires? Are they TRYING to show exactly how out of touch they are?”
The Democratic senator’s line has the benefit of being true. Replacing existing federal taxes with a national sales tax would be profoundly regressive, slashing the tax burden for the wealthy, and imposing brutal new hardships on Americans who have the least.
The Biden White House issued a statement this week that added, “Non-partisan experts across the ideological spectrum agree this proposal would raise taxes for middle-class Americans and slash them for the wealthy, while President George W. Bush’s Treasury Department analyzed a similar proposal and found it would raise taxes by thousands of dollars each year for typical middle-class families; the burden would likely be especially great for seniors and families with children. Meanwhile, people earning millions of dollars a year would see tax cuts of $100,000 or more.”
By way of a defense, Carter tried to argue that there would be options for the American public. “If you don’t want to pay a tax, don’t buy it. It’s as simple as that,” the Georgia Republican told Semafor.
No, really. That's what he said. Struggling consumers, many of whom live paycheck to paycheck, can circumvent the burdens of a new national sales tax by simply choosing not to buy things.
Is it any wonder Democrats are looking forward to this debate?
To be sure, while the bill has 23 co-sponsors, representing roughly a tenth of the House GOP conference, Republican leaders are not on board with this plan, and they’d almost certainly prefer to ignore it.
But they can’t: McCarthy, in desperation, agreed to bring the so-called “Fair Tax Act” to the floor for a vote. The new speaker didn’t say when, exactly, members would have their say on the legislation, but it will apparently happen in this Congress.
At that point, Democrats — knowing this monstrosity will never become law — will be only too pleased to shine a light on the Republicans’ doomed plan to raise taxes on millions of families.
Ordinarily, party leaders schedule votes on measures that unite their allies and divide their opponents. The GOP’s national-sales-tax bill does the opposite, uniting their opponents and dividing their allies.