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With an eye on 2024, Rosen denounces far-right tax plan that abolishes IRS, sets 30% sales tax

Gabby Birenbaum
Gabby Birenbaum
CongressGovernment
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Sen. Jacky Rosen (D-NV) sponsored a Senate resolution opposing a tax policy considered politically radioactive, potentially previewing her approach to calling out Republican extremism on the campaign trail in 2024.

Rosen and Sen. Jon Tester (D-MT), another Democrat who will face a tough re-election campaign in 2024 if he runs again, introduced the resolution – a non-binding way for the Senate to issue an official opinion – Wednesday.

The resolution would condemn the FairTax proposal, a fringe economic policy that has been floating around the Republican Party since the 1990s. The FairTax Act of 2023 – introduced by Rep. Buddy Carter (R-GA) – would abolish the Internal Revenue Service and replace income tax with a sales tax of about 30 percent on all purchases. 

It does not have the backing of Speaker Kevin McCarthy (R-CA) or the majority of the Republican caucus. But FairTax re-entered the congressional lexicon after Rep. Andrew Clyde (R-GA), one of the holdouts in McCarthy’s lengthy speakership battle, said one of the concessions McCarthy made was to allow the proposal to go through the committee process and receive a hearing.

The proposal would shift most of the tax burden to low-income and middle-income people, who must spend a much higher percentage of their income on goods and services than wealthier individuals. Its supporters champion it as a means of simplifying the tax code, encouraging a “culture of savings” and a means to take down the IRS, a frequent right-wing punching bag. Though FairTax proponents say families would get monthly rebates to cover certain essential goods such as groceries, groups across the ideological spectrum, including the Wall Street Journal editorial board, the Bush administration and Democrats, agree the proposal would massively increase the cost of goods, the tax burden on the middle class and the deficit.

“At a time when hardworking families are experiencing high inflation and rising costs, Congressional Republicans are working to enact a tax plan that would dramatically raise the prices families pay for food, medicine, and all other goods and services,” Rosen said in a statement. “I urge the full Senate to join me in rejecting this new tax and, instead, work toward a tax cut for the middle class to give hardworking families more breathing room.”

For Democrats such as Rosen and Tester, the reemergence of the FairTax and its association with prominent backers (Florida Gov. Ron DeSantis sponsored the bill three times when he was a congressman), is a political gift from the right they can publicly capitalize on. Beyond filing a Senate resolution condemning it, Rosen also penned an op-ed slamming the tax proposal – illustrating just how toxic she thinks it is. 

The resolution calls on the Senate to oppose the proposal and instead enact a middle-class tax cut without cutting Social Security, Medicare, Medicaid, and funding for service members, veterans and law enforcement. Sen. Catherine Cortez Masto (D-NV) is a co-sponsor.

This story was updated at 8 a.m. to include the proposed sales tax rate in the headline.

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