There is a 0% chance that a proposal to eliminate the federal income tax and replace it with a massive national sales tax will even get out of the Republican-controlled House, let alone become law. But the fact that such a bluntly soak-the-poor idea is even getting an airing under new House Speaker Kevin McCarthy should stand as ominous confirmation that he is basically a hostage to his caucus’s crazy-right flank.
The grotesquely misnamed Fair Tax Act comes up perennially and usually dies a quick and appropriately ignoble death. This time, though, it’s expected to actually get a House vote. The idea is to do away with all current federal taxes completely — personal and corporate income taxes, payroll taxes, estate taxes, all of it — and run the government entirely with a hefty federal sales tax on all goods and services.
Proponents say it would be a 23% tax (which would be bad enough), but that’s based on a misleading “tax inclusive” calculation of the rate. The actual checkout-counter reality would be more like 30%. Add local and state sales taxes (9.68% combined in St. Louis), and you’re quickly approaching $40 in sales tax on every $100 spent on goods or services.
