Senate Democrats unveil resolution condemning Republicans’ national sales tax proposal

Two Senate Democrats introduced a resolution on Wednesday condemning a proposal that House Republicans issued last month to raise sales taxes to 30 percent and repeal other taxes like income, payroll and estate. 

The resolution from Sens. Jacky Rosen (D-Nev.) and Jon Tester (D-Mont.) would declare that the Senate opposes the Fair Tax Act of 2023 and supports the passage of a “responsible tax cut” that would benefit working families, grow the middle class and make the wealthiest individuals and billion-dollar corporations pay “their fair share” of taxes. 

It would also declare that the Senate opposes paying for tax cuts with cuts for Social Security, Medicare or Medicaid or pay and benefits cuts for servicemembers, veterans or law enforcement. 

Rep. Buddy Carter (R-Ga.) introduced the bill, which has been co-sponsored by 25 Republicans, to significantly raise sales tax to account for almost all of the federal government’s revenue in exchange for other taxes being withdrawn. 

The proposal would allow workers to keep their paychecks without the government taking out any money, but they would need to pay significantly more when buying products, including groceries. 

“A national sales tax is an awful idea—we don’t have one in Montana, and we don’t need the federal government imposing one on us,” Tester said in the release. “At a time when working families are getting killed by inflation along with rising health care and housing costs, the last thing we need is to raise prices on everything from gas to groceries.” 

Different versions of the tax proposal have been introduced in Congress in past years, but the proposal this term comes as House Republicans have pushed to repeal funding that was given to the Internal Revenue Service (IRS) to hire 87,000 employees over the next decade as part of the Inflation Reduction Act. 

The IRS funding and new hires were intended to increase tax enforcement on individuals earning higher incomes who have been getting away with not paying as much as they should be. 

The Fair Tax Act would also significantly limit the role that the IRS plays in collecting taxes. 

Although supporters of the legislation have heralded it as a way for people to keep their money without the government taking it through the various taxes, finance experts have said the proposal would increase taxes on the middle class overall. 

“I urge the full Senate to join me in rejecting this new tax and, instead, work toward a tax cut for the middle class to give hardworking families more breathing room,” Rosen said in the release. 

Tester and Rosen cited an analysis from the nonpartisan Tax Policy Center that said the bill would take more money from lower-income and middle-class families than the current system and “increasingly” burden parents. 

Even if the Fair Tax Act passes in the Republican-controlled House, it is unlikely to make progress in the Democratic-controlled Senate. 

Tester previously vowed to oppose the measure in a letter to Senate Majority Leader Charles Schumer (D-N.Y.) and Senate Minority Leader Mitch McConnell (R-Ky.) last month.