Voters Are Mostly Against GOP Plan to Overhaul the Tax System
Republicans face uphill climb selling plan to voters, survey indicates
In an email to Morning Consult, Carter noted that President Joe Biden said during his State of the Union address last week that the current U.S. tax system is unfair.
“Under my proposal, the wealthy will pay their fair share while a family of four can spend $30,000 completely tax free, with no penalties for saving or IRS agents monitoring their Venmo transactions,” Carter said, adding that Republicans “need to do more work educating the public” about the legislation.
GOP lawmakers do have their work cut out for them on the awareness and persuasion fronts, per the survey: 64% of voters said they had heard little or nothing at all about the proposal.
And when it comes to ways to overhaul the U.S. tax system, voters were most likely to support keeping the federal tax system the same: 52% said they support a progressive tax with the taxation rate based on income level, and 20% favored a flat tax. Another 26% said they’d prefer paying federal taxes via a levy on goods and services rather than income, the method proposed in the FairTax Act.
While the bill cites the sales tax rate at 23%, in practice, some estimate that consumers would pay an effective 30% rate at the time of purchase. The bill has been referred to the House Ways and Means Committee, but is unlikely to pass in either the House or the Democratic-majority Senate, and Biden has promised to veto the bill were it to be passed. The White House did not respond to requests for comment.
Elsewhere in Washington, supporters of the bill are miles apart ideologically from Democrats and even some Republicans. Rep. Joaquin Castro (D-Texas) said in an email that “under the latest Republican tax plan, America’s working families and seniors would pay more every time they go to the grocery counter or order something online. A 30% sales tax would erase all the progress we’ve made against inflation and crush folks who are already struggling to make ends meet.”
Steven L. Hayes, president of Americans for Fair Taxation, a group that has campaigned for the FairTax Act since it was first proposed by then-Rep. John Linder (R-Ga.) in 1999, noted that there is confusion among consumers about how the plan would work in practice. When it comes to consumers’ “sticker shock” at the cash register, he pointed to the bill’s inclusion of a “prebate” that would deposit funds into taxpayers’ accounts each month up to a certain level to cover the cost of the tax.
Morris Pearl doesn’t buy that justification. A former managing director at BlackRock Inc., Pearl now chairs the Patriotic Millionaires, a group of high-net-income Americans that aims to tackle economic inequality by, among other things, addressing loopholes in the tax system that allow the wealthy to pay lower rates of taxes.
Pearl said less-wealthy Americans would pay more in taxes as a share of their overall income under the plan, especially given that many live paycheck to paycheck and spend everything they make each month. “So for those people, all of their money would be subject to a tax,” he said.
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