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Democrats Lambast GOP Plan to Abolish Income Tax and Impose 30 Percent Sales Tax

“Are they TRYING to show exactly how out of touch they are?” Sen. Elizabeth Warren wrote.

Senator Elizabeth Warren hosts a Senate hearing at the JFK building on T Safety and Leadership Failures on October 14, 2022.

Democratic and progressive lawmakers are criticizing the GOP for an extremist tax plan that Republicans are planning to soon put to a vote in the House that would completely overhaul the tax system to blatantly favor the rich.

In what seems to be a concession to the most far right members of the Republican caucus, House Speaker Kevin McCarthy (R-California) has teed up a vote on the so-called Fair Tax Act. The bill would get rid of all federal taxes, including estate taxes and individual and corporate income taxes, and abolish the Internal Revenue Service (IRS). In place of federal taxes, the bill would impose an effective 30 percent national sales tax, a number that could easily balloon in the future.

The result would be a much larger tax bill for the working class and a hefty financial gift to the wealthiest Americans. It is hard to overstate how regressive the effects of this tax would be, and tax experts say that it would have wide-ranging negative impacts — not just on income taxes but also on things like Affordable Care Act premiums and the child tax credit.

Sen. Elizabeth Warren (D-Massachusetts) excoriated Republicans in a tweet on Thursday that struck an almost dubious tone over the sweeping nature of the proposal.

“Hold on: House Republicans want a national 30 percent sales tax on everything from groceries to gasoline? They want to raise taxes on working-class & middle-class families while slashing them for millionaires & billionaires?” she wrote. “Are they TRYING to show exactly how out of touch they are?”

Republicans have spent the last year moaning about high inflation, placing the blame for skyrocketing prices on Democrats and President Joe Biden despite the actual evidence pointing to corporate greed as the cause; the party, in messaging against Democrats for the 2022 election, bemoaned high costs of groceries and other goods in trying to paint themselves as the party of the working class.

In reality, the Republican Party seems to be taking pains to show that they’re anything but, especially in the few weeks the GOP has been in control of the House.

Last week, House Republicans passed a bill that would slash tens of billions of dollars of funding for the IRS that was pegged specifically to go after wealthy tax cheats, which cost the government trillions in lost revenue. They also passed a tax package to kill congressional workers’ union, in which staffers are fighting to have more of a say in their working conditions.

“There’s nothing fair about the ‘Fair Tax Act.’ It’s just another handout to the rich at the expense of hard-working Americans,” said Rep. Bonnie Watson (D-New Jersey). “[House Republicans’] vision for the economy puts the wealthy first and workers last.”

“The GOP plan to fight inflation is to enact a 30 percent sales tax on basic necessities like food and gas. Let’s be clear about what this plan does: it slashes taxes for the richest Americans and puts that burden onto poor and working class families,” wrote Rep. Pramila Jayapal (D-Washington) on Wednesday.

Republicans are pushing this tax plan, which would not pass the Senate and which President Joe Biden has pledged to veto, despite the fact that the current tax and financial system is already quite regressive.

The tax system is structured in many ways to allow wealthy and corporate taxpayers to dodge taxes, allowing and even encouraging some of the richest people on Earth to pay extremely low tax rates, avoid paying taxes on their largest assets, and pass on their wealth to their children tax-free. That the wealthy are able to exploit the tax code in this way is by design, as conservatives have spent decades implementing this sort of tax liberation for the rich, while fighting tooth and nail against attempts to restore tax enforcement against the 1 percent.

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