Democrat Senators Move to Oppose Republican National Sales Tax Plan

Sen. Jon Tester (D-Mont.) at a Senate hearing in Washington on Sept. 27, 2017. Samira Bouaou/The Epoch Times

Sens. Jon Tester (D-Mont.) and Jacky Rosen (D-Nev.) has authored a resolution opposing a Republican plan to enact a national sales tax.

The senators’ resolution cites the economic challenges faced by many Americans and lawmakers’ responsibility to “relieve” financial pressures felt by their constituents.

The GOP plan, the FairTax Act of 2023 (H.R. 25), was introduced in the House of Representatives by Rep. Earl Carter (R-Ga.) on Jan. 9 and imposes a national sales tax on taxable property or services.

It states the tax rate would be 23 percent in 2025, with adjustments in subsequent years, and would be in lieu of the current income taxes, payroll taxes, and estate and gift taxes.

Exemptions from the tax would include items that fall under the category of used and intangible property; for property or services purchased for business, export, or investment purposes; and for state government functions.

The senators’ resolution opposing the FairTax Act of 2023 asserted that the change would increase the cost of goods and services by roughly 30 percent, which would increase the average household’s grocery bill by around $3,500 annually.

The resolution stated the senators’ support for the passage of a “responsible tax cut that would actually benefit hardworking families.”

Several Republican lawmakers co-sponsored the GOP tax bill, including Rep. Jeff Duncan (R-S.C.), who said of the legislation, “As a former small business owner, I understand the unnecessary burden our failing income tax system has on Americans.

“The Fair Tax Act eliminates the tax code, replaces the income tax with a sales tax, and abolishes the abusive Internal Revenue Service. If enacted, this will invigorate the American taxpayer and help more Americans achieve the American Dream.”

According to the Institute on Taxation and Economic Policy, five states currently do not impose a sales tax, and every state exempts a number of items that could become subject to the national sales tax.

The bill would allow the Treasury Department to administer the national sales tax in states that do not administer it currently, potentially allowing for a different federal body governing the evolved form of tax collection.

Tester and Rosen’s offices did not immediately respond to a request for comment.