22. Department of the Treasury · Notable · Needs Congress
Replace the income tax with a consumption tax
Printed page 698 22. Department of the Treasury
“The public finance literature is clear that a consumption tax would minimize government's distortion of private economic decisions and thus be the least economically harmful way to raise federal tax revenues. There are several forms that a consumption tax could take, including a national sales tax, a business transfer tax, a Hall–Rabushka flat tax, or a cash flow tax.”
What has happened
- Not started
No federal consumption tax was enacted, proposed by the administration, or voted on. Public Law 119-21 went the other way: section 70101 made the seven-bracket income tax rate schedule permanent, entrenching the income tax the Quote would replace. H.R. 25, the FairTax Act of 2025 — a national sales tax replacing the income, payroll, estate and gift taxes — was introduced 2025-01-03 and referred to Ways and Means, where it remains; no business transfer tax, flat tax or cash flow tax bill has moved either.
Research log
What was searched, and what didn’t count as evidence
Research notes
H.R. 25 is a lead, not Evidence: introduction and referral is not started under playbook §3b.
- Action
- create
- Object
- federal consumption tax
- ID
- 1940