Republicans Want to Raise Federal Taxes to 30% with Regressive Sales Tax - Crazy

Bloomburg wrote:But there is an even more breathtaking example of the conservative movement’s priorities. As a condition for agreeing to Kevin McCarthy’s accession to the speakership, House rightists secured a commitment for a floor vote on a ludicrous proposal they call the Fair Tax Act.

The legislation would replace the current income tax, payroll tax and estate tax with a 30% national sales tax. Except to make it sound better, Fair Tax proponents call it a 23% tax. Their logic is that if something sells for $100 plus $30 in tax, then it’s a 23% tax — because $30 is 23% of $130.

That’s not how calculations of tax rates work. The reason for this dodgy math is that they are trying to obscure the reality that this plan would make most people worse off. According to the Tax Policy Center, in 2018 the middle quintile of the income distribution paid 8.9% of federal taxes while earning 15.2% of national income. Switching that to a flat consumption-based rate would be a tax increase on those middle-income households and an even larger one on the bottom 40%.