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US Congressman Proposes Bill to Replace Tax Code with National Consumption Tax and Abolish IRS
New Tax System: The Fair Tax Act of 2025
On January 9, 2025, Representative Earl “Buddy” Carter (R-GA) introduced the Fair Tax Act of 2025, a bill that challenges the existing US tax code and proposes a national consumption tax. The bill aims to promote freedom, fairness, and economic opportunity by repealing income, payroll, estate, and gift taxes, and enacting a broad-based national sales tax on goods and services purchased for final consumption.
According to the bill, the current Federal income tax system hinders economic growth, discourages small businesses and farms, and negatively impacts Americans’ standard of living. The bill also highlights the administrative and compliance cost pressures on individual and corporate taxpayers, as well as privacy violations and lack of transparency in taxation.
Key Features of the Proposed Tax System
The Fair Tax Act proposes a single, national sales tax on goods and services, preventing double, multiple, and cascading taxation. The bill aims to:
- Facilitate savings and investment
- Improve the standard of living of Americans
- Help businesses
- Eliminate bureaucratic burdens on individual and business taxpayers
IRS Abolition
One of the most significant changes proposed in the Fair Tax Act is the abolition of the Internal Revenue Service (IRS). According to Representative Carter, the new tax system eliminates the need for the IRS, and taxes should be easy and transparent, eliminating the need for professional assistance.
The bill is supported by several Republican congressmen, who believe that the act provides a “commonsense solution to eliminate the need for the weaponized IRS, simplify our tax code, and foster economic prosperity.”
IRS vs. the Crypto Community
Recently, the IRS was sued by the Blockchain Association and other organizations over new reporting rules that redefine the concept of a broker. The rules would require DeFi platforms to provide transaction information and proceeds to the IRS until 2027.
The plaintiffs argue that DeFi platforms are not brokers and should not be subject to these rules. They believe that the rules are unconstitutional and harmful to American development and leadership in the crypto industry.
The IRS abolition proposed in the Fair Tax Act may be seen as a possibility to end the service’s attacks on DeFi ecosystems. However, it is unclear whether the bill will be adopted.
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