Sponsors (15)
The bill trades elimination of federal income and payroll taxation, simpler filing, and potential pro-growth incentives for major fiscal and administrative disruption—raising regressivity risks, threatening Social Security/Medicare funding, and creating substantial legal, enforcement, and implementation uncertainty.
Most taxpayers (individual filers and many small employers) would stop owing federal individual income and self-employment taxes beginning in 2027, reducing filing complexity and increasing take-home pay for many households.
Employers could face lower payroll tax costs, which may reduce labor costs and support hiring or wage increases for workers.
Shifting from income taxation to a consumption (national sales) tax emphasizes taxing spending rather than earnings, which may encourage saving and investment and potentially support long-term economic growth.
Low-income households would pay a larger share of their income under a broad national sales tax because they spend more of their income, making the overall system more regressive and raising costs for vulnerable families.
Replacing income and payroll taxes risks undermining dedicated financing for Social Security and Medicare, jeopardizing program solvency or forcing large appropriations or benefit cuts unless clear replacement funding is established.
Repealing the income-tax system, removing IRS authority, and massively restructuring the Internal Revenue Code would create broad legal, administrative, and transitional uncertainty and large implementation costs for taxpayers, employers, and the government.
Based on analysis of 10 sections of legislative text.
Repeals federal income, payroll, and estate/gift taxes and replaces them with a national sales tax; restructures tax administration and adjusts Social Security indexing.
Introduced January 3, 2025 by Buddy Carter · Last progress January 3, 2025
Repeals most federal income, payroll, estate, and gift taxes and replaces them with a new, broad-based national sales tax; restructures the Internal Revenue Code and the Treasury/IRS to create a Sales Tax Bureau and an Excise Tax Bureau; and changes how Social Security cost‑of‑living adjustments are calculated to account for the new sales tax. The bill phases these major tax-code changes to begin January 1, 2027, limits IRS activity and appropriations tied to the repealed taxes starting in 2029, and requires destruction of many federal tax records except those needed by Social Security or ongoing litigation. If the Constitution’s Sixteenth Amendment is not repealed within seven years, the sales-tax provisions stop applying after that period.