As the new Congress convened this week, Congressman Rob Woodall (R-GA) introduced legislation that would abolish the Internal Revenue Service in favor of a flat national consumption tax.
Known as the FairTax, Woodall’s introduction of the legislation has been ongoing for the last few Congresses, but it has never advanced. One change for this year, however, is that the bill has garnered more support in the House than in any previous session of Congress. It has 58 co-sponsors at the time of this writing.
Proponents of the FairTax legislation say that it would be much more simple than the current tax code which currently stands at somewhere around 70,000 pages in length. Woodall said its application would naturally be more transparent and fair since it would take more from higher income earners who earn and spend more. It would also give poor families a break by giving them an exemption for all purchases associated with basic living costs.
Woodall also notes that the legislation would repeal the 16th amendment which is what allows the federal government to levy an income tax.
According to Woodall, “The FairTax would repeal all federal corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, the death tax, and gift taxes – and replace them with a revenue-neutral personal consumption tax. Overnight, the FairTax would allow individuals to keep 100 percent of their income without the government first taking a penny.”
