FairTax Act of 2025

House Bill

H.R. 25

119th Congress

FairTax Act of 2025

In Committee

Introduced:Jan 3, 2025

Primary Sponsor

Earl L. Carter

Representative

Republican

GA-1

Cosponsors

14

Quick Stats

Policy Area

Taxation

Summary

The FairTax Act replaces all federal income, payroll, estate, and gift taxes with a 23 percent national sales tax starting in 2027. It eliminates the IRS and provides monthly rebates to families to offset tax on necessities. The sales tax ends if the Sixteenth Amendment is not repealed within seven years.

Latest Action

Referred to the House Committee on Ways and Means.

SponsorEarl L. Carter (R-GA)

Introduced1/3/2025

StatusReferred to the House Committee on Ways and Means.

ChamberHouse

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Vote Prediction

FairTax Act of 2025

The FairTax Act replaces all federal income, payroll, estate, and gift taxes with a 23 percent national sales tax starting in 2027. It eliminates the IRS and provides monthly rebates to families to offset tax on necessities. The sales tax ends if the Sixteenth

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The FairTax Act replaces all federal income, payroll, estate, and gift taxes with a 23 percent national sales tax starting in 2027. It eliminates the IRS and provides monthly rebates to families to offset tax on necessities. The sales tax ends if the Sixteenth Amendment is not repealed within seven years.

Bill Number: 25
Sponsor: Earl L. Carter (R-GA)
Introduced: 1/3/2025
Status: Referred to the House Committee on Ways and Means.
Policy Area: Taxation

Data from Congress.gov

AI-generated summary

Fact Sheet

Title: FairTax Act of 2025
Bill Number: 25
Sponsor: Earl L. Carter (R-GA)
Status: Referred to the House Committee on Ways and Means.
Introduced: 1/3/2025
Summary: The FairTax Act replaces all federal income, payroll, estate, and gift taxes with a 23 percent national sales tax starting in 2027. It eliminates the IRS and provides monthly rebates to families to offset tax on necessities. The sales tax ends if the Sixteenth Amendment is not repealed within seven

Data from Congress.gov

AI Summary

Plain-English explanation of this bill

The FairTax Act replaces all federal income, payroll, estate, and gift taxes with a 23 percent national sales tax starting in 2027. It eliminates the IRS and provides monthly rebates to families to offset tax on necessities. The sales tax ends if the Sixteenth Amendment is not repealed within seven years.

Last updated: 1/6/2026

Official Summary

Congressional Research Service summary

FairTax Act of 2025This bill replaces federal income, payroll, estate, and gift taxes with a federal sales tax beginning in 2027 and eliminates the Internal Revenue Service.The bill establishes a 23% tax-inclusive (30% tax-exclusive) federal sales tax rate on taxable property and services to be administered primarily by each state. The federal sales tax rate is adjusted annually beginning in 2028 so that it is the sum of the <ul><li>general revenue rate (14.91%);</li><li>old-age, survivors and disability insurance rate; and</li><li>hospital insurance rate. </li></ul>The bill includes exemptions for property or services purchased for business, investment, and certain state government functions.Registered, qualified families may receive a monthly sales tax rebate in the amount of the monthly federal poverty level (or twice such amount for married individuals) multiplied by the federal sales tax rate. Each family member must have a Social Security number and be a lawful resident of the United States. Federal sales tax revenues are allocated to general revenue, the Social Security trust funds, and the Medicare trust funds. (Special allocation rules apply for 2027.)The bill eliminates appropriations for the Internal Revenue Service after FY2029 and establishes an Excise Tax Bureau and a Sales Tax Bureau within the Department of the Treasury. Finally, the bill terminates the federal sales tax if the Sixteenth Amendment to the Constitution (authorizing a federal income tax) is not repealed within seven years from the date the bill is enacted.

Key Points

Main provisions of the bill

Replaces income, payroll, estate, and gift taxes with sales tax
Establishes 23 percent tax-inclusive national sales tax
Eliminates the Internal Revenue Service
Provides monthly rebates for families at poverty level
Terminates if 16th Amendment not repealed in seven years

How This Impacts Americans

Potential effects on citizens and communities

Americans would pay taxes at the point of purchase instead of through income withholding. The IRS would be eliminated. Families would receive monthly rebates to cover sales tax on basic necessities up to the poverty level.

Policy Areas

Primary Policy Area

Taxation

Related Subjects

Administrative law and regulatory procedures

Constitution and constitutional amendments

Department of the Treasury

Employment taxes

Executive agency funding and structure

Foreign and international corporations

Fraud offenses and financial crimes

Gambling

Games and hobbies

General taxation matters

+9 more

Scope & Jurisdiction

Jurisdiction Level

federal

Congressional Session

119th Congress

Citation Reference

25, 119th Congress (2025). "FairTax Act of 2025". Source: Voter's Right Platform. https://votersright.org/bills/118-hr-25

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