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House GOP seeks to abolish IRS, replace income tax with consumption tax

The Hill – by Pete Kasperowicz

Fifty-four House Republicans on Thursday reintroduced legislation that would terminate the IRS and replace the system of income taxes on people and corporations with a consumption tax.

The FairTax Act, from Rep. Rob Woodall (R-Ga.), would abolish the 16th Amendment, which was ratified 100 years ago this February. That amendment gives Congress the power to impose income taxes without having to spend the revenues evenly among the states.

Woodall’s bill, H.R. 25, would replace the current tax system with a 23 percent consumption tax on all new goods and services. He said Thursday that this change would eliminate the need for a complicated tax code, and would be the kind of tax reform that helps reinvigorate the economy.

“The momentum is building for fundamental tax reform, and it’s fueled by the American people,” he said. “By passing the FairTax, Congress can shield middle-class Americans from the burden of the payroll tax, the largest tax burden that most American families bear.

“The FairTax would make it easier for businesses to grow and hire new workers by abolishing America’s corporate income tax, currently the highest in the world.”

Woodall argues that eliminating the corporate income tax would give companies an incentive to repatriate billions of dollars from overseas that would be subject to taxes under current law.

Specifically, the bill would repeal the payroll tax, individual and corporate income taxes, the self-employment tax, and estate and gift taxes.

It would be replaced with a 23 percent consumption tax that people living at or below the poverty rate would not have to pay. The bill would require a “probate” to be paid to all residents that is equal to the consumption tax the poor would normally pay, thus sparing them from taxes completely.

Among the 53 Republican co-sponsors are House Financial Services Committee Chairman Jeb Hensarling (R-Texas) and Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.).

The 112th Congress ended with 70 co-sponsors for Woodall’s last version of his FairTax bill.

Read more: http://thehill.com/blogs/floor-action/house/275697-house-gop-seeks-to-abolish-irs-replace-income-tax-with-consumption-tax#.UOnpPaZFcnE.twitter#ixzz2HOFIM11Y

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9 Responses to House GOP seeks to abolish IRS, replace income tax with consumption tax

  1. Mark says:

    good idea but it’s a bit late now…

  2. Jolly Roger says:

    I see. Eliminate corporate tax completely and push all the costs of government onto the consumer. I guess this sounds like a “fair tax’ to someone else, but I think we’ve seen time and time again that these “tax cuts for the rich” NEVER result in the new jobs that they promise; just a lower standard of living for working people.

  3. H5mind says:

    Amazing how they talk about abolishing an amendment which was never properly ratified in the first place (it “took effect” instead). Getting rid of the IRS only works if you end the Federal Reserve too- they are hand and glove.

    Otherwise, we would simply follow the same road to banana republichood as any other country with a VAT or Value Added Tax.

    By the way, since we would have no control over such a tax and it’s inevitable increases i.e., (no representation), could we go ahead and get rid of Congress while we’re at it? I’m sure His Majesty king O would absolutely love the idea!

  4. Robert says:

    Odds are, we’ll end up with both forms of Taxation. Just simplify the Tax code to 2 pages for now.

  5. Vince Gaughan says:

    The 16th amendment was never legally ratified. Even so, the amendment establishes a direct or excise tax on profits. This is the income that is taxed. The tax applies to corporations and foreign born nationals legally living and working int the States United. The Supreme Court has ruled ( Rulings that have never been overturned) that the 16th amendment created no new powers to tax. The United States has always had and continues to have the power to lay a tax on income. A tax on income is a direct tax and requires apportionment according to population. The first rule of apportionment is “How much?” Enough with the fraud and lies!

  6. NC says:

    How about we just skip the tax altogether and declare it unconstitutional and follow the CONSTITUTION!!! Stop beating around the bush. No need to follow or make up a law that is an unconstitutional law. Wake up, people! The money that you get from your job is YOURS, NOT the government’s. What part of that do you and the government not understand?

  7. Large Scale Aggressor says:

    The obvious intent is to reduce taxes for the wealthy and raise them for the middle class.

  8. beerBoy says:

    The Tea Party types should rename themselves to the Quixote Party as it seems that they spend an awful lot of time tilting at windmills.

  9. # 1 NWO Hatr says:

    Unfortunately, people actually have to have jobs to be taxed in the first place, so ANY kind of tax is fast becoming a moot point.

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