House GOP Bill Aims to Abolish the IRS and Rewrite the Tax Code \ stacker news ~Politics_And

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House GOP Bill Aims to Abolish the IRS and Rewrite the Tax Code www.kiplinger.com/taxes/bill-aims-to-abolish-the-irs-for-consumption-tax

614 sats \ 20 comments \ @freetx 20 Feb Politics_And_Law

The Fair Tax Act of 2025 would replace key federal government revenue sources with a national sales tax and rebate. These include personal and corporate income tax, death tax, gift tax, and payroll tax.

According to its advocates, the consumption tax would eliminate the need for the IRS.

If enacted, the national consumption tax rate would be a tax-inclusive rate of 23% as of the 2027 tax year.

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21 sats \ 0 replies \ @IamSINGLE 21 Feb

Lol! Death tax, seriously? A man can't be liable for his death, can he? I bet if we even talk about a death tax in India, there will be coup d'état even against Modi, the world's most popular leader right now.

53 sats \ 0 replies \ @Aardvark 20 Feb

I'd love this. Ever since I got into bitcoin I barely buy shit anyway.

54 sats \ 0 replies \ @justin_shocknet 20 Feb

Not hawkish enough, feels like its being set up for Trump to knock it down... payroll and death tax is not MAGA aligned

32 sats \ 1 reply \ @jgbtc 20 Feb

Death tax just gives the government another reason to want us dead.

20 sats \ 0 replies \ @Undisciplined 20 Feb

Fun fact (maybe I should save it for tomorrow): there was a brief lapse in the death tax for a couple of days and deaths were shown to have increased during those days.

31 sats \ 13 replies \ @freetx OP 20 Feb

So it appears the way the rebates work is a monthly check is sent out to everyone based on your tax status (married w/ kids, etc).

This is pretty interesting! There is a couple of angles you can look at this....

Family of 4 yearly rebate: $11,820 broken down to $985 monthly. Single adult $5,730 annual broken down to $477 monthly.
Effectively it works like a "points system" on your credit card (ie. 5% cash back). That money returned would be tax-free and you can do cool things like stack sats with it
It also functions a bit like UBI as all citizens would receive this rebate
It also would apply to illegals so they would pay into the system, but probably not get the rebate check

42 sats \ 4 replies \ @Bell_curve 20 Feb

I read the rebate is sent only to net tax payers. 40 percent of tax filers pay zero income tax to the Internal Revenue Service

47 sats \ 2 replies \ @freetx OP 20 Feb

I found the bill online and ran it thru Perplexity. It says:

Rebates Availability

Scope of Eligibility:

The FCA rebate is not restricted to taxpayers. Instead, it is available to all "qualified families" who meet residency and registration requirements, regardless of income level or tax liability.

Qualified Family Definition: A "qualified family" includes individuals sharing a common residence and their dependents, such as spouses, children (biological, adopted, or under legal guardianship), and lineal ancestors (e.g., parents, grandparents).

Exclusions:

Incarcerated individuals scheduled to be confined for six months or more2.
Non-citizens without lawful residency status.

19 sats \ 1 reply \ @Undisciplined 20 Feb

I believe @Bell_curve is thinking of the recently proposed DOGE rebates, which would only be sent to net tax payers.

29 sats \ 0 replies \ @Bell_curve 20 Feb

yes! that's the one!

33 sats \ 0 replies \ @kepford 20 Feb

Indeed. A ton of people love April 15th because they get a big check. They don't pay income tax at all.

102 sats \ 7 replies \ @Undisciplined 20 Feb

This is so much better. It also gets the government out of our personal and business finances.

Another benefit is that people really feel the tax, and everyone feels it. That should offer more resistance to tax increases than the current system of selectively taxing certain groups.

51 sats \ 2 replies \ @kepford 20 Feb

The IRS is the most invasion agency in government.

93 sats \ 1 reply \ @Undisciplined 20 Feb

That might be the best part of switching to sales taxes. There's no more need for intrusion into our personal finances.

60 sats \ 0 replies \ @kepford 20 Feb

Indeed. Anyone that cares about privacy should start with the government. Sadly many think the gov is the solution.

33 sats \ 3 replies \ @freetx OP 20 Feb

100%

Also I love it from a philosophical standpoint. Consumption can be avoided...income tax is not.

(Aside can't find mention of exemptions but it seems like there would need to be some things either totally exempt or having a reduced tax rate imposed...things like food, mortgage payments, rent, insurance payments, etc)

30 sats \ 2 replies \ @Undisciplined 20 Feb

Maybe they would let states make some of those decisions, since this is piggy backing on the state (or local) sales tax systems.

30 sats \ 1 reply \ @freetx OP 20 Feb

Maybe they would let states make some of those decisions

Great point. Probably the cleanest solution.

An alternative idea is to just tax everything (any time money changes hands for whatever reason), but make it a very low rate like 2%. In some ways this would be "fairest" since it wouldn't impact daily necessities but then also capture things like stock trading, etc.

30 sats \ 0 replies \ @Undisciplined 20 Feb

My dad read about a proposal to do that years ago. He was quite taken with the idea.

My main objection to that is the introduction of a bunch of new points of friction in our transactions. If a larger rate is levied at the point of final consumption, the tax incidence will impute it's way back through the production structure.

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21 sats \ 0 replies \ @Cje95 21 Feb

I bet this is the same one they introduced last Congress lol the beginning of the year is full of bills being introduced that have been Congress after Congress with just the dates change. It makes good PR but often these Members never change their bills to actually make the passable.