Highlights:
2017: DeSantis Cosponsored The FairTax Act Of 2017. [Congress.gov, H.R. 25 – FairTax Act Of 2017, 7/11/17]
2015: DeSantis Cosponsored The FairTax Act 2015. [Congress.gov, H.R. 25 – FairTax Act Of 2015, 1/6/15]
2013: DeSantis Cosponsored The FairTax Act Of 2013. [Congress.gov, H.R. 25 – FairTax Act Of 2013, 1/23/13]
VIDEO: DeSantis Highlighted His Support For A FairTax And A Flat Tax. According to DeSantis answering constituent questions via YouTube, “DESANTIS: Even before this IRS scandal happened, I had already signed on to a couple of bills. One is HR 25, which is, establishes a FairTax. I’m also supportive of a flat tax.” [DeSantis Answers Constituent Questions via YouTube via American Bridge 21st Century, 6/7/13]
The FairTax Act Would Have Imposed A 23% National Sales Tax In Lieu Of Eliminating Income Taxes For Both Employment, Corporations, Estate, And Gifts. According to Congress.gov, “This bill is a tax reform proposal that imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income and corporate income tax, employment and self-employment taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2017, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property, for property or services purchased for business, export, or investment purposes, and for state government functions.” [Congress.gov, H.R. 25 – FairTax Act Of 2015, 1/6/15]
The FairTax Act Would Have Allowed American Families To Receive A Monthly Sales Tax Rebate Depending On Family Size And Poverty Guidelines. According to Congress.gov, “Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.” [Congress.gov, H.R. 25 – FairTax Act Of 2015, 1/6/15]
The FairTax Act Would Have Made States Responsible For Administering, Collecting, And Remitting The Sales Tax To The U.S. Department Of Treasury. According to Congress.gov, “The states have the responsibility for administering, collecting, and remitting the sales tax to the Treasury.” [Congress.gov, H.R. 25 – FairTax Act Of 2015, 1/6/15]
The FairTax Act Would Have Allocated Tax Revenues To General Revenues, Old-Age And Survivors Insurance Trust Fund, Disability Insurance Trust Fund, Hospital Insurance Trust Fund, And Federal Supplementary Medical Insurance Trust Fund. According to Congress.gov, “Tax revenues are to be allocated among: (1) the general revenue, (2) the old-age and survivors insurance trust fund, (3) the disability insurance trust fund, (4) the hospital insurance trust fund, and (5) the federal supplementary medical insurance trust fund.” [Congress.gov, H.R. 25 – FairTax Act Of 2015, 1/6/15]
The FairTax Act Would Have Eliminated Funding For The IRS After FY 2019. According to Congress.gov, “No funding is allowed for the operations of the Internal Revenue Service after FY2019.” [Congress.gov, H.R. 25 – FairTax Act Of 2015, 1/6/15]
Tax Policy Center Found Lower-Income Households Spend More Than They Earn Opposed To High-Income Households And The FairTax Act Would “Raise Taxes On People In The Middle.” According to the Tax Policy Center, “The problem is that very high-income households spend only a fraction of their income, while low- and middle-income people spend all or most of what they make. A sales tax, by design, exempts a large share of income at the top. If it includes a prebate to protect people at the bottom and doesn’t add to the deficit, then it must raise taxes on people in the middle. The latest data on spending as a share of income published by the Bureau of Labor Statistics show that lower-income households spend more than they earn—presumably aided by tax credits and other cash transfers, gifts from family members and friends, and borrowing (see chart). People earning over $150,000 spend only half of their income (and the share continues to fall as incomes rise, although it’s not shown in the summary statistics). Compared with a broad-based income tax, the proposal effectively allows a 50% deduction for the average high-income household. Because it is also a flat rate tax, it would be especially regressive, especially compared with the current income tax where rates rise with incomes.” [Tax Policy Center, 5/27/15]
Tax Policy Center: “The Bottom Line Is That Tax Burdens On Middle-Income Households Would Surely Rise” Under A FairTax Proposal. According to the Tax Policy Center, “FairTax advocates counter that their proposal would also replace regressive payroll and excise taxes (as well as highly progressive estate taxes), but the bottom line is that tax burdens on middle-income households would surely rise while high-income families would get a big tax cut. Some people might call that an UnfairTax.” [Tax Policy Center, 5/27/15]
Tax Policy Center Noted That Compared To A Broad-Based Income Tax, FairTax Proposals Would Effectively Allow A 50% Tax Deduction For The Average High-Income Household. According to the Tax Policy Center, “Compared with a broad-based income tax, the proposal effectively allows a 50% deduction for the average high-income household. Because it is also a flat rate tax, it would be especially regressive, especially compared with the current income tax where rates rise with incomes.” [Tax Policy Center, 5/27/15]
Tax Policy Center: “The Bottom Line Is That […] High-Income Families Would Get A Big Tax Cut” Under The FairTax Proposal. According to the Tax Policy Center, “FairTax advocates counter that their proposal would also replace regressive payroll and excise taxes (as well as highly progressive estate taxes), but the bottom line is that tax burdens on middle-income households would surely rise while high-income families would get a big tax cut. Some people might call that an UnfairTax.” [Tax Policy Center, 5/27/15]
Panel Was Also Concerned A Federal National Sales Tax Would Result In Widespread Tax Evasion And Create Problems For States That Rely Heavily On Sales Taxes. According to the Tax Policy Center, “A decade ago, President George W. Bush’s Tax Reform Panel considered a sales tax as a revenue-neutral replacement for the income tax. It rejected the idea after concluding that the rates would have to be much higher than promised by the FairTax people. It also calculated the tax would be very regressive as the figure below shows. […] The Panel also found that the prebate would be extremely expensive, hard for taxpayers to manage, and complex for the IRS to administer. In addition, the panel was concerned a federal retail sales tax rate of 30 percent or more would result in widespread evasion and create real problems for states that rely heavily on their own sales taxes.” [Tax Policy Center, 5/27/15]
Brookings: If A FairTax Proposal Was Enacted, “Federal Deficits Would Rise By Nearly $10 Trillion Over The Next Decade.” According to Brookings, “As explained in previous research, FairTax proponents made a mathematical or logical mistake when they calculated the required rate. When estimating government revenues under the sales tax, advocates implicitly assumed that consumer prices (what consumers pay, including the sales tax) would rise by the full amount of the sales tax and that producer prices (what producers receive, net of the sales tax) would remain constant. But when estimating government spending, they implicitly assumed the opposite: consumer prices would remain constant and that producer prices would fall by the full amount of the tax. These assumptions are inconsistent and understate the tax rate required to maintain inflation-adjusted government spending and revenues. Correcting this mistake, we find that if the tax-inclusive rate remained 23%, federal deficits would rise by nearly $10 trillion over the next decade.” [Brookings, 3/1/23]