House GOP Bill to Replace IRS with Fair Tax Rejected by Biden Admin.

• The Biden Administration has opposed a bill proposed by House Republicans proposing to eliminate the IRS and replace it with a “Fair Tax” and a national consumption tax.
• The bill, called the “Family and Small Business Taxpayer Protection Act,” calls for a rescission of funds made available to the IRS.
• According to the Congressional Budget Office, this bill would increase the deficit by nearly $115 billion over 10 years.

The Biden Administration recently expressed opposition to a bill proposed by House Republicans that seeks to significantly reduce funding for the Internal Revenue Service (IRS) and replace it with a “Fair Tax” and a national consumption tax. This bill, called the “Family and Small Business Taxpayer Protection Act,” was co-sponsored by Representative Earl L. “Buddy” Carter (R-GA) and calls for a rescission of funds made available to the 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.

Carter argued that the bill would simplify the tax code and “encourage growth and innovation,” while also eliminating the need for the IRS to hire 87,000 new agents. However, the Biden administration strongly disagrees, claiming that the bill would enable wealthy tax cheats to engage in additional tax fraud and avoidance, thus increasing the deficit by nearly $115 billion over 10 years, according to an estimate by the Congressional Budget Office.

In response to the proposed legislation, White House Press Secretary Jen Psaki said that the bill “would severely undermine the enforcement of our tax laws.” She also noted that the bill would harm the middle class and small businesses, as it would make it easier for the wealthy to avoid paying their fair share of taxes.

The Biden administration has indicated that it will veto the bill if it passes through both chambers of Congress. The administration has also stated that it will work to protect the IRS’s budget and funding for enforcement, so that it can continue to ensure the fairness of the U.S. tax system.