House Republicans are renewing efforts to introduce a national sales tax and abolish the Internal Revenue Service (IRS), framing the measure as a way to ensure illegal immigrants contribute taxes. Representative Buddy Carter (R-GA) will unveil the FairTax Act of 2025 on Thursday, a bill designed to overhaul the U.S. tax system by replacing the federal income tax with a 23% national sales tax.
The bill, obtained by the Washington Examiner, proposes eliminating the IRS and shifting taxation from income to spending. Carter argues the measure will capture untaxed spending from sources like illegal immigrants and the underground economy. According to Carter, this ensures fairness while reducing the government’s reliance on income tax collection.
The FairTax Act would provide monthly rebates to lawful U.S. residents based on poverty guidelines and family size, shielding lower-income families from the full impact of the sales tax. Exemptions would apply to used goods, intangible property, and purchases for business, government, or investment purposes.
Republicans backing the bill see it as an opportunity to address multiple conservative priorities, including shrinking the size of the federal government and reforming tax collection. Co-sponsors include Representatives Andrew Clyde (R-GA), Scott Perry (R-PA), Andy Biggs (R-AZ), and others. Carter emphasized the importance of ensuring illegal immigrants contribute to taxes while they remain in the country, stating, “As long as they’re here, they should be taxed.”
The FairTax concept has been championed by conservatives for decades, particularly within the grassroots Tea Party movement. However, critics warn the plan could reduce federal revenue and require steep spending cuts. During past debates, tax experts cautioned that a consumption-based tax might disproportionately affect middle-class Americans while benefiting wealthier individuals.
Democrats strongly oppose the measure. In 2023, Democratic lawmakers, including then-Rep. Wiley Nickel (D-NC), criticized the proposed sales tax as burdensome for working families and introduced resolutions to block its implementation. Democrats have pushed alternative tax plans, including targeted middle-class tax cuts, arguing that a sales tax would increase the cost of living for everyday Americans.
The bill’s prospects are uncertain, with Democrats controlling the Senate and White House. However, the renewed push signals a broader Republican focus on fiscal reform and immigration accountability.
