Republicans introduce legislation to get rid of IRS and replace income taxes with a consumption tax

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george-sorosSounds good doesn’t it? Anything that involves getting rid of the IRS sounds awesome. Getting rid of the income tax sounds great too. But when I hear that Republicans want to replace them with a European style VAT or consumption tax were I get a little worried. Of course, it’s not like this drastic alteration of the tax code would have a snowball’s chance in hell of passing the Senate, or being signed into law by Obama, but it’s still interesting to think about.

Fifty-four House Republicans on Thursday reintroduced legislation that would terminate the IRS and replace the system of income taxes on people and corporations with a consumption tax.

The FairTax Act, from Rep. Rob Woodall (R-Ga.), would abolish the 16th Amendment, which was ratified 100 years ago this February. That amendment gives Congress the power to impose income taxes without having to spend the revenues evenly among the states.

Woodall’s bill, H.R. 25, would replace the current tax system with a 23 percent consumption tax on all new goods and services. He said Thursday that this change would eliminate the need for a complicated tax code, and would be the kind of tax reform that helps reinvigorate the economy.