Tuesday, February 11, 2025–11:30 a.m.
-David Crowder, WRGA News-
It’s an idea that kind of came and went, but now it appears to be back and pickup up steam.
Republican Congressman Earl “Buddy” Carter, who represents Georgia’s 1st District, is pushing House Resolution 25, the Fair Tax Act, which would replace the current tax code with a national consumption tax, eliminating the Internal Revenue Service.
“Given the choice between a property tax, an income tax, an estate tax, and a consumption tax, people would prefer a consumption tax because they have control,” Carter said. “If you make $40,000 a year, you take home $40,000 then you pay taxes on the things that you buy.”
The current proposal sets the nationwide consumption tax at 23 percent. It does not exclude things like medicine and groceries. However, every month, each American will get a “pre-bate” which is a check to cover basic necessities such as food.
According to Carter, there will be no need for the Internal Revenue Service because you will not have an income tax.
“The president has proposed creating an external revenue service as opposed to an internal revenue service,” Carter said. “The president has also said that the 88,000 IRS personnel that the last administration hired, that he’s going to fire them or sent them to the border and let them protect the border.
Carter also contends that the Fair Tax would mean those who are not currently paying income taxes will have to pay the consumption tax.
“This gathers in the underground market,” he said. If you are here illegally or if you’re doing drugs and not paying taxes on it, you’re going to pay taxes now. This is a consumption tax, a tax you pay when you buy a product, therefore you are going to pay taxes now, and it does encompass and include the underground economy.”
The Fair Tax was first introduced in 1999 by former Georgia Congressman John Linder. Critics have said it would disproportionately benefit the wealthy and corporations while the middle class would bear a greater share of the tax burden. Carter disagrees.
“If a wealthy person is going to buy a boat, they are going to buy a yacht,” he said. “Now, I am probably going to buy a jon boat. The taxes on a yacht will be much more than those on a jon boat. So, there is a difference there. Again, it’s a 23 percent consumption tax, and yes, 23 percent is a lot, but I’d like to think we may be able to do better than that, and perhaps we can.”
The legislation has already had one hearing before the House Ways and Means Committee, and Carter is hopeful it will get another hearing soon.