FairTax Act of 2025
Latest action · Jan 3, 2025 Referred to the House Committee on Ways and Means.
Progress
Where this bill reached, and when. A stage with no date was not reached; one that failed a vote and later carried shows the date it carried.
- IntroducedJan 3, 2025
- Passed HouseNot reached
- Passed SenateNot reached
- To the PresidentNot reached
- Became lawNot reached
Summary
FairTax Act of 2025
This 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
- general revenue rate (14.91%);
- old-age, survivors and disability insurance rate; and
- hospital insurance rate.
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the federal sales tax if the Sixteenth Amendment to the Constitution (authorizing a federal income tax) is not repealed within seven years from the date the bill is enacted.
Cosponsors 14
Members who signed on, in the order they did. Signatures ran from Jan 3, 2025 to Mar 31, 2025; 9 are original cosponsors, there from the day it was introduced.
| Seat | Cosponsor | Signed on | |
|---|---|---|---|
| R-GA | Andrew S. Clyde | Original | Jan 3, 2025 |
| R-AZ | Andy Biggs | Original | Jan 3, 2025 |
| R-AL | Dale W. Strong | Original | Jan 3, 2025 |
| R-MO | Eric Burlison | Original | Jan 3, 2025 |
| R-FL | John H. Rutherford | Original | Jan 3, 2025 |
| R-TX | John R. Carter | Original | Jan 3, 2025 |
| R-GA | Richard McCormick | Original | Jan 3, 2025 |
| R-PA | Scott Perry | Original | Jan 3, 2025 |
| R-OH | Warren Davidson | Original | Jan 3, 2025 |
| R-GA | Barry Loudermilk | Jan 6, 2025 | |
| R-MD | Andy Harris | Jan 7, 2025 | |
| R-NC | Mark Harris | Feb 4, 2025 | |
| R-GA | Mike Collins | Feb 14, 2025 | |
| R-AL | Barry Moore | Mar 31, 2025 |
Committees 1
Where it was sent and what each committee and subcommittee did with it, in order.
| Chamber | Committee | What it did |
|---|---|---|
| House | Ways and Means Committee | Referred Jan 3, 2025 |
Actions 2
Everything that happened, newest first.
- Jan 3, 2025Introduced in House
- Jan 3, 2025Referred to the House Committee on Ways and Means.
Research
What has been written about this bill: committee reports, cost estimates, the sponsor’s authority statement, printed hearings and the Congressional Research Service’s work.
Constitutional authority
The sponsor’s statement, as printed in the Congressional Record, vol. 171, no. 1, January 3, 2025, page H36.
Printed hearings 1
Hearings whose printed record names this bill, newest first: hearings on it, and wider hearings where it came up.
| Number | Hearing | Committee | Held |
|---|---|---|---|
| — | MEMBER DAY HEARING ON MATTERS WITHIN THE COMMITTEE'S TAX JURISDICTION433 pages | Ways and Means Committee | Jan 22, 2025 |
Titles 2
Every title it has carried, official and short, at each stage.
- Official Title as Introduced
- To promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national sales tax to be administered primarily by the States.
- Short Title(s) as Introduced
- FairTax Act of 2025
Subjects
Assigned by the Library of Congress. Policy area: Taxation.
- 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
- Government information and archives
- Government trust funds
- Income tax credits
- Income tax deductions
- Income tax rates
- Interest, dividends, interest rates
- Intergovernmental relations
- Internal Revenue Service (IRS)
- Medicare
- Poverty and welfare assistance
- Sales and excise taxes
- Small business
- Social security and elderly assistance
- State and local government operations
- State and local taxation
- Tax administration and collection, taxpayers
- Tax reform and tax simplification
- Taxation
- Taxation of foreign income
- Transfer and inheritance taxes
Text 1
Each version as it was printed, newest first.
- Jan 3, 2025Introduced in House
Everything here is as published by Congress: the summary is the Congressional Research Service's, the action wording is the clerks', and the subjects are the Library of Congress's. How far it got is read from the actions themselves, taking the most recent one of each kind, so a bill that failed a vote and later passed is shown as having passed. Records come from this bill on Congress.gov and govinfo.gov; cost estimates are the Congressional Budget Office's, and the hearings are the printed hearings GovInfo publishes, which can appear months after the hearing.
