Thursday, June 20, 2024

Biden Vows to Veto House Republicans’ ‘Fair Tax Act’ Proposing Elimination of IRS

Several U.S. House of Representatives Republicans have proposed legislation that would significantly decrease funding for the Internal Revenue Service (IRS). The move comes after the newly elected Speaker, Kevin McCarthy, stated that he would challenge the funding granted to the U.S. tax agency in the previous year.

Biden Administration Opposes Bill for Rescinding Funding for IRS Enforcement of Tax Laws

After Kevin McCarthy, the speaker of the United States House of Representatives, announced his intention to repeal the tens of billions in funding that was approved for the Internal Revenue Service (IRS) last year, House Republicans voted on a bill that aims to eliminate the federal income tax and replace it with a “Fair Tax” and a national consumption tax that would be collected by each state. The bill is called the “Family and Small Business Taxpayer Protection Act” and it calls for a “rescission of certain funds made available to the IRS.”

The H.R. 25 bill, also known as the Fair Tax Act, was co-sponsored by representative Earl L. “Buddy” Carter (R-GA). “Instead of adding 87,000 new agents to weaponize the IRS against small-business owners and middle America, this bill will eliminate the need for the department entirely by simplifying the tax code with provisions that work for the American people and encourage growth and innovation,” Carter said in a statement. “Armed, unelected bureaucrats should not have more power over your paycheck than you do.”

“This reckless bill would increase the deficit by nearly $115 billion over 10 years per an estimate by the Congressional Budget Office by enabling wealthy tax cheats to engage in additional tax fraud and avoidance,” the Biden administration said in a statement on Jan. 9, 2023.

Reports indicate the proposed legislation is not supported by Democrats, who currently control the Senate. Furthermore, the White House has stated that U.S. president Joe Biden will veto any bill that aims to defund the Internal Revenue Service (IRS). The Biden administration’s statement emphasizes that the “bill would rescind funding passed in the Inflation Reduction Act (IRA) that enables the IRS to crack down on large corporations and high-income individuals who cheat on their taxes and evade the taxes that they owe under the law.”

The White House added:

If the president were presented with H.R. 25 – or any other bill that enables the wealthiest Americans and largest corporations to cheat on their taxes, while honest and hard-working Americans are left to pay the tab – he would veto it.

Meanwhile, the Internal Revenue Service (IRS) is preparing to have a new commissioner run the tax agency, and reports indicate that it will likely be Danny Werfel. The news also follows statements from the acting special agent-in-charge of the IRS-Criminal Investigation’s New York office, who said “cryptocurrency is here to stay.”

In recent times, American crypto advocates have been plagued with anxiety over the advent of a new tax reporting requirement that will necessitate digital currency exchanges, Venmo, Cash App, PayPal, Airbnb, and eBay sending 1099-K forms to their users. The IRS, with its unyielding gaze, has set its sights on payments of $600 or more for goods and services received through a third-party payment network.

U.S. lawmakers want Americans to believe that the $600 rule and the deployment of 87,000 new IRS agents is a concerted effort to combat the nefarious billionaire tax evaders and mega-corporations. However, many Americans are not so easily swayed, and believe that this added enforcement and the $600 rule is nothing but a preposterous ploy aimed at the common man.

Advocating for Abolition of the IRS: A Repeated Idea by Various Proponents

The bill is not the first time Republican officials have discussed abolishing the IRS. On Oct. 30, 2022, the U.S. senator from Texas, Ted Cruz (R-TX), tweeted “Abolish the IRS!” and repeated the sentiment earlier this week.

Former representative Ron Paul, R-Texas, has advocated for shutting down the IRS on many occasions. Paul believes the IRS is intrusive and that it violates privacy rights by requiring individuals and businesses to disclose personal financial information. He has advocated for a flat tax or a national sales tax as an alternative to the current income tax system.

The late American economist, historian, and political theorist Murray Rothbard also argued that the IRS represented a violation of property rights and an illegitimate use of government power. Rothbard wrote extensively on the subject, and in his view, the IRS, as an enforcement arm of the state, was a tool of coercion and oppression and therefore must be abolished. Meanwhile, as far as the Fair Tax Act is concerned, Rep. Bob Good (R-VA), said he supports the Fair Tax “because it simplifies our tax code.”

“This transforms the U.S. tax code from a mandatory, progressive, and convoluted system to a fully transparent and unbiased system which does away with the IRS as we know it,” the Virginia representative added.

Tags in this story
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What do you think about Biden saying that he would veto the Fair Tax Act? What impact would the elimination of the IRS and implementation of the Fair Tax Act have on the U.S. economy? Share your thoughts in the comments section below.

Jamie Redman

Jamie Redman is the News Lead at News and a financial tech journalist living in Florida. Redman has been an active member of the cryptocurrency community since 2011. He has a passion for Bitcoin, open-source code, and decentralized applications. Since September 2015, Redman has written more than 6,000 articles for News about the disruptive protocols emerging today.

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