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Repeals the federal individual income, payroll (including withholding and self-employment), estate, and gift taxes and replaces much of the federal tax structure with a new national sales tax administered under a reorganized Treasury. The bill creates a new Sales Tax subtitle in the tax code, moves certain Social Security funding and CPI adjustments to reflect the new sales tax, authorizes new Treasury bureaus (including a Sales Tax Bureau and an Excise Tax Bureau), ends many IRS appropriations and duties for the repealed taxes, and conditions the entire scheme on repeal of the Sixteenth Amendment within seven years. The measure makes detailed technical and conforming changes across the Internal Revenue Code, changes some procedural tax rules (interest, filing fees, collection timing), requires federal record destruction for repealed taxes (with narrow exceptions), and includes a sunset if the constitutional repeal does not occur within the seven-year window.
The bill promises simpler filing, higher take‑home pay, and a centralized national sales tax administration by replacing income/payroll/estate taxes, but it trades those gains for large fiscal risk, likely regressive tax burdens on lower‑income Americans, major administrative disruption, and reduced taxpayer protections and record transparency.
All taxpayers would no longer owe federal individual income tax beginning Jan 1, 2027, eliminating annual federal income tax filing and payments for households and simplifying tax compliance.
Workers and the self-employed would see payroll tax withholding and self-employment payroll taxes removed, increasing take‑home pay and net income for many individuals.
Estate and gift taxes would be eliminated, simplifying transfers at death and reducing tax liabilities for heirs and estate owners.
Seniors, Medicare beneficiaries, and current payroll‑tax‑funded programs face a substantial risk because repealing payroll taxes and the 16th Amendment would remove dedicated revenue streams and could lead to insolvency, benefit cuts, or politicized appropriations for Social Security and Medicare.
Low‑ and middle‑income households would likely pay a larger share of their income in taxes because a national sales tax is typically regressive and could raise prices on goods and services, increasing cost‑of‑living burdens.
Eliminating individual income and payroll taxes would create a large federal revenue shortfall, risking higher deficits and forcing deep spending cuts, new taxes elsewhere, or reductions to essential federal programs (defense, health, safety net).
Introduced January 3, 2025 by Buddy Carter · Last progress January 3, 2025