How MAGA Republican’s radical tax bill will dismantle the federal system created by Civil War Republicans
One of the promises House speaker Kevin McCarthy (R-CA) made to the extremist members of the Republican conference to win his position was that he would let them bring the so-called Fair Tax Act to the House floor for a vote.
On January 8, Representative Earl “Buddy” Carter (R-GA) introduced the measure into Congress. The measure repeals all existing income taxes, payroll taxes, and estate and gift taxes, replacing them with a flat national sales tax of 30% on all purchased goods, rents, and services.
Its advocates nonsensically call it a 23% tax because, as Bloomberg opinion writer Matthew Yglesias explained their thinking, “if something sells for $100 plus $30 in tax, then it is a 23% tax — because $30 is 23% of $130.”
The measure abolishes the Internal Revenue Service, leaving it up to the states to administer the tax.
The bill says the measure will “promote freedom, fairness, and economic opportunity.” But a 30% sales tax on everything doesn’t seem to do much for fairness or economic opportunity for all, since it would, of course, hit Americans with less money to spend far harder than it would Americans with more money to spend. And the end of income, gift, and estate taxes would be a windfall for the wealthy.
Such a bill is not going to pass this Congress, and if it did, President Biden would not sign it. Two days after Carter introduced the measure, Biden said to the press: “National sales tax, that’s a great idea. It would raise taxes on the middle class by taxing thousands of everyday items from groceries to gas, while cutting taxes for the wealthiest Americans.” He promised he would never agree to any such legislation.
But the measure is illuminating. It explicitly rejects the position, and the principles, of the original Republican Party.
Members of the Republican Party invented the U.S. income tax during the Civil War, and they created the precursor to the IRS to collect it. To find money to fight the war, they raised tariffs on common products but immediately turned to the novel idea of an income tax, and a graduated one at that, to make sure that “the burdens will be more equalized on all classes of the community, more especially on those who are able to bear them,” as Senator William Pitt Fessenden (R-ME) put it.
Justin Smith Morrill (R-VT) agreed. “The weight [of] taxation must be distributed equally,” he said, “Not upon each man an equal amount, but a tax proportionate to his ability to pay.”
The Republicans then quite deliberately constructed a national system for collecting the new taxes. In the midst of the Civil War, they urged their colleagues to imagine what would happen if a disloyal state were permitted to manage the collection itself. A Democratic legislature could simply refuse, and the government might perish for lack of funds to support the troops. The government had a right to “demand” 99 percent of a man’s property for an urgent necessity, Morrill said. When the public required it, “the property of the people…belongs to the Government.”
Today’s Republicans are taking a position opposite to the one that the men who formed the Republican Party did during the Civil War. They want to get rid of the income tax and put state governments in charge of the nation’s revenue system. Wording in the measure suggests that this change is because state governments have expertise in sales taxes, but it is no accident that the plan dismantles the federal system that Civil War Republicans accurately noted gives Americans “a sense of personal responsibility in the safety and stability of the nation.”
This radical tax bill strikes a blow for states’ rights, much as the southern leaders the original Republicans stood against did in the 1860s. It is far easier for a minority to take over a state and impose its will on a majority there than it is to do the same at the national level. And Republicans are definitely working to cement their control in the states.
In The Nation, Joan Walsh recently pulled together some of the many stories of voter suppression that have come lately from Republican-dominated states. Former Georgia Senator Kelly Loeffler recently noted that her state’s 2021 law cutting way back on mail-in ballots helped elect Republicans: Walsh points out that mail-in ballots dropped by 81% between 2020 and 2022, and Black voter turnout dropped.
Robert Spindell, an election commissioner in Wisconsin who was one of Trump’s fake electors in 2020, wrote an email to about 1700 people saying that Republicans “can be especially proud of the City of Milwaukee (80.2% Dem Vote) casting 37,000 less votes than cast in the 2018 election with the major reduction happening in the overwhelming Black and Hispanic areas.” Senator Ron Johnson won reelection in that race over Democratic candidate Mandela Barnes, who is from Milwaukee, by about 27,000 votes.
In Florida, Missouri, and Ohio, Republican lawmakers are trying to make it harder for citizens to use ballot initiatives, as progressive policies like Medicaid expansion, the legalization of marijuana, hikes in the minimum wage, abortion rights, and redistricting by independent commissions have all turned out to be popular.
And in New Mexico, Solomon Peña, an unsuccessful Republican candidate for the state legislature last year, was arrested for allegedly hiring men to shoot at the homes of four Democratic elected officials.
By taking control of the states, Republicans can impose their will. Centering taxation there, rather than the federal government, is one more way to try to make people conform to their worldview.
Tucked inside the proposed tax measure is broad government oversight of a state’s poorer citizens. It provides an option for “qualified” families to get a rebate, but each member of the household must be registered annually with the state. Every member of the family over the age of 21 must certify in writing that all family members have been listed, that they are all legal residents of the U.S., and that none “were incarcerated on the family determination date.” Incarceration is defined as anyone “incarcerated in a local, State, or Federal jail, prison, mental hospital, or other institution.”
This measure will not pass in this Congress, but it is striking proof that the modern Republican Party has abandoned not only its original principles, but even its more recent philosophy of “freedom” from an intrusive government.
Patrick Semansky (AP), J. Scott Applewhite (AP), and Alex Brandon (AP)
Letters from an Аmerican is a daily email newsletter written by Heather Cox Richardson, about the history behind today’s politics