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Updated Feb 7, 2023, 7:20am EST
politics

The Fair Tax is haunting the 2024 GOP field

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The News

Ron DeSantis
REUTERS/Marco Bello

President Biden and Democratic allies have relentlessly attacked Republicans in recent weeks for cracking the door open to a Fair Tax, a plan to scrap the American tax code and replace it with a jumbo-sized sales tax.

They might get many more opportunities to bring it up. Several of the most prominent 2024 names on the Republican side have supported Fair Tax bills at the state and national level and enthusiastically praised the idea along the way.

Florida Governor Ron DeSantis, a founding member of the House Freedom Caucus, repeatedly sponsored a Fair Tax bill while in Congress. The legislation came up at times in Democratic attacks during his first run for governor.

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Nikki Haley, who is expected to announce a run later this month, said in 2012 she would “support the Fair Tax and any reform that would eliminate income tax” in South Carolina as governor.

Former Vice President Mike Pence was a vocal proponent of a Fair Tax in his House days, and bragged that he was willing to take the political heat that came with his support.

“I recently did sign onto this Fair Tax proposal, which I expect somebody will attack me for someday because it means if you did away with the income tax, it means you’d have a sales tax of anywhere from 15% to 20%,” he told a town hall audience in 2009.

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Pence explained that he thought a national sales tax would help crack down on tax cheats, because it would be harder to avoid taxes on purchases versus income.

“It’s easy to demagogue it — you’re for raising taxes on groceries and stuff,” he said. “But you can take even a casual look at this idea and fall in love with it.”

Former Secretary of State Mike Pompeo said during his 2010 run for Congress that he “would certainly support the Fair Tax” paired with a Constitutional Amendment abolishing income tax, although he would look at any “low tax” proposals as well.

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Whether they all continue to support the initiative remains to be seen. Haley and DeSantis spokespeople did not return requests for comment, and a Pence spokesperson said he “is supportive of efforts that attempt to reduce the tax burden on hard-working Americans.”

As for Pompeo: “The Secretary supports making the tax code simpler, fairer and flatter. And he supports reducing the role the IRS plays intruding into the lives of every American,” a spokesperson told Semafor.

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Shelby And Joseph's View

The trail of quotes and endorsements could leave candidates vulnerable to election attacks — and not just from Democrats.

A source close to Donald Trump said that his rivals would have to “answer for what they supported and what they’ve advocated in the past,” including a Fair Tax bill “that ultimately increases the tax rate on the people who are hurting the most under Biden’s economy.”

The Trump campaign is expected to release a video outlining the former president’s own tax position soon and the source said the former president “would not support a tax that ultimately gives a higher tax rate to lower and middle-income Americans.”

Republican critics of the Fair Tax have warned it could cause trouble for the party if it gains traction — anti-tax activist Grover Norquist has called it “suicidal” — and Speaker Kevin McCarthy has said he personally opposes it, even as he may give it a floor vote as part of his agreement with conservatives who initially opposed his speakership.

On the Democratic side, many in the party are already eyeing it as a vulnerability on the right that could help them in a general election.

“Democrats will run with it,” Tyson Brody, a Democratic operative, said.

President Biden has so far made a show of threatening to veto the latest Fair Tax bill, which he said last month would tax “every item from groceries, gasoline, clothing, supplies, [and] medicine.” There’s even a decent chance it makes it into his State of the Union speech.

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Room for Disagreement

Not everyone believes that Republicans who backed the Fair Tax are bound to land in hot water.

“We all did dumb things in our youth,” Ryan Ellis, president of the right-leaning Center for a Free Economy, told Semafor. “Lots of good people were on it in the past until it was fleshed out and analyzed, and found inadequate. Now those people tend not to be on it anymore…It’s a kooky idea a few people still have, but that’s about as far as it goes.”

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Notable

  • Writing in the Wall Street Journal, John Cochrane argues that a Fair Tax “funds the government with the least economic distortion” and encourages Republicans to go for it.
  • At The New Republic, Tim Noah calls broad consumption taxes “a dumb idea,” but notes that similar tax ideas have long appealed to liberal policy thinkers as well as conservatives.
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