Many taxpayers across the nation have more than once wished that the IRS (Internal Revenue Service) did not exist. The IRS is the most fearsome agency in the federal government. The foregoing could become a reality, since the Fair Tax initiative was certainly introduced in Congress in 1999 by Georgia congressman John Linder, who proposed eliminating personal and corporate taxes, including gift taxes, gifts, payroll taxes, which are those that apply to employees and employers.
The idea behind the proposal seems to be that it would make it easier to abolish the IRS because in fact the states already collect sales taxes and these taxes would be just right to collect the additional sales taxes for the federal government and remit the money to the US Treasury.
But this strategy has problems. Five states do not impose a sales tax, and each state exempts a variety of purchases that would apparently be subject to national sales tax. The bill allows the Treasury to administer the national sales tax in states that do not. This would suggest that some type of federal apparatus is required for the collection of these taxes, which, it is believed, would here involve the IRS.
This proposal is being taken up and supported by the group of congressional Republicans led by the new Speaker of the House, Kevin McCarthy, R-Calif., who is proposing to allow a vote on a bill that would abolish the Internal Revenue Service and institute a "Fair Tax," which would replace federal income and other taxes with a national excise tax administered by the states.
To show their desire to see this bill move forward, House Republicans on Monday, Jan. 9, 2023, approved a bill to strip the IRS of much of the additional $80 billion in enforcement funding enacted last year by the Democrats` Reduced Inflation Act. Though the bill is not expected to advance in the Senate, which is still controlled by Democrats.
In summary, every person who buys a consumer good would pay sales tax, of this tax a part would be assigned to the state that collects it and another part would be for the federal government. By replacing the income tax and establishing a single tax, the IRS would have no reason to exist and could be abolished.
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