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H.R.25 – Repeal income tax and abolish the Internal Revenue Service

CabSauce

It shouldn't really need to be mentioned at this point, but sales taxes are extremely regressive. The burden is shouldered by people with lower incomes.

Edit - source: https://taxfoundation.org/taxedu/glossary/regressive-tax/

panarky

It should be obvious by now that the whole game is to shift cost and risk to the bottom 90% while shifting profit and wealth even further to loyalists among the top 0.1%.

Viewed through this lens, the whole program is remarkably internally consistent. Tariffs on imports, cuts to corporate taxes, capital gains taxes and estate taxes, indiscriminate across-the-board reductions of 50% or more to regulatory agencies, etc.

Dig1t

Aren’t tariffs just corporate taxes which are paid by big corps who import stuff built overseas?

At least when you incentivize stuff to get built here the money goes to union workers or at least stays within the US.

Also the regulatory cuts are sorely needed at this point. It took longer to get regulatory approval for the Starship rocket than it did to actually build the rocket (the biggest and most complicated rocket ever built).

hypeatei

> Aren’t tariffs just corporate taxes which are paid by big corps who import stuff built overseas?

No, they're not "just" that. Those costs get passed onto the consumer in the form of higher prices. Corporations aren't going to eat the cost out of the goodness of their hearts.

> At least when you incentivize stuff to get built here the money goes to union workers or at least stays within the US.

If a widget from China costs $100 because of tariffs, then American companies who make the same widget have no reason to undercut that since they know consumers have no other options -- effectively raising the price floor.

There are also issues with the "union workers get the money" because we're effectively stiffing the rest of the U.S. population in order to prop up a specific segment of the economy.

legitster

> At least when you incentivize stuff to get built here the money goes to union workers or at least stays within the US.

We could frame this another way - if every state in the US enacted tariffs on every other state, would we all be collectively richer or poorer?

Maybe some states could set up their own cottage automotive industry, but overall there is going to be more deadweight loss to the economy than revenue made by the tariffs.

legitster

Sales tax is not regressive per se. It's just much less progressive than an income tax. Rich people still pay more overall since they spend more money.

An example of a regressive tax would be something like cigarette taxes - poor people would actually spend a larger share of their income since they are also more likely to smoke.

CabSauce

People with lower incomes do spend larger a portion of their money on things that incur sales tax.

Higher income people spend more of their money on investments and other assets.

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some-guy

That is, unfortunately, the point.

throw16180339

That's a feature to the bill's sponsors.

vunderba

Additionally, in most countries, crimes that carry a monetary penalty are also highly regressive (such as traffic violations like speeding).

Aunche

This is a very unpopular opinion, but I believe ideally taxes in America should be more a lot more "regressive" like they are in Sweden. VATs are economically more efficient than income tax, and harder for corporations to avoid. Taxes are only actually regressive when the tax dollars don't go back into social services for the people, so that's something that would need to be prioritized first. I suspect that a major reason why the American government is so inefficient with spending is because there is no incentive for them to be, as the majority of tax dollars comes from a minority of high income workers.

https://www.economist.com/united-states/2017/11/23/american-...

CabSauce

I believe the most commonly supported tax strategy by economists is an income tax that goes negative below some threshold.

Personally, I'm open to VAT tax because it would be much easier to incorporate the disposal cost into goods and remove externalities (like pollution).

As you've said, it would be ideal to have strategies in place to lessen the burden on people with lower incomes.

This bill doesn't have any of those strategies or objectives.

drivingmenuts

It shouldn’t need to be said, and it probably won’t be. Even if it was said, most people probably wouldn’t get it.

I’m sure the libertarian’s are rejoicing right now. As is every VC.

knallfrosch

[flagged]

legitster

Currently, the top 50% of taxpayers pay 89% of all federal income taxes. And only about half of Americans pay income tax.

So doing some back of envelope math, that corresponds to maybe about a $200 tax savings for the median citizen. But an increase of about $600 on their purchases.

This is an extremely bad deal even if you are moderately wealthy. Income tax is not an ideal tax, but at least by its nature it's leveraged on people with income. But a sales tax affects you even if you are retired. There is no strategic savings strategy you can use to avoid it.

There's an irony that the last election was supposedly about inflation and the economy - but between this, the tariffs, and the (supposed) foreign policy agenda - we're looking at one of the most expensive US administrations sessions ever.

markhahn

IOW "burn it all down".

I never thought I'd see anarchists being called "Republican".

legitster

To be fair, Republicans have consistently opposed the income tax since the 1800s.

seanmcdirmid

Maybe, but Lincoln established the IRS and the first income tax (today's Republicans descend more from Andrew Jackson than they do from Lincoln, though).

legitster

Lincoln's tax was universally hated even within his own party and was only authorized for a few years to pay for the war.

oysterville

I feel like a lot of folks who use the label "anarchists" don't really understand the concepts behind anarchism.

krapp

They aren't anarchists. They absolutely believe in the state and the monopoly on violence, and the legitimacy of their own power. They aren't even eliminating taxation - they just want to replace everything with a sales tax.

hypeatei

The things they want to burn down don't benefit working class people either, just the billionaire class that is surrounding Trump for the next administration (which includes the richest man in the world, Elon Musk)

For as much as I hear about the "deep state" from MAGA, you think they'd want to actually address that by abolishing / reforming agencies like the CIA or NSA.

bdangubic

Everyone who thinks that "deep state" is a problem in the United States should go to any country which does not have "deep state" (e.g. Russia, China...) and see how that works out for them :)

icsa

There is precedent for no federal income tax in the United States.

Prior to the federal income tax (1913), all federal government expenses were covered by duties, tariffs, and levies.

legitster

The federal government also didn't pay for highways or a standing army then.

I'm sure there are people who want to abolish the IRS and also don't want roads or support a military. But if you can get enough of them in a room together to win a caucus I will eat my hat.

taeric

I'd be interested in knowing what the cost of maintaining infrastructure for the US prior to that date was? My gut is this is akin to thinking you could go back to the income you had when you were living with your parents, not realizing that you now have so much more that you have to take care of.

Could probably go further and ask how much it was costing to expand infrastructure? It isn't like they opted for a larger source of income for no reason?

gedpeck

There is also precedent for child labor and slavery in the U.S. Societies are far more complex now and the administration and governance of them are correspondingly more complex.

zamalek

> Societies are far more complex now

Exactly: we have a superior moral compass. Complexities of society aside, other comments rightfully point out that sales tax has a higher burden the lower the income.

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Terr_

> Prior to the federal income tax (1913)

Also during 1862-1872 and 1892-1895.

> covered by duties, tariffs, and levies

Which come with an equally long history of demonstrated problems, like being economically-inefficient and prone to corruption.

That last concern is particularly relevant given the criminality of the Trump administration: How many suitcases of cash does it take to get a special exception for/against your friends/allies?

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bloopernova

I hope all these planned economic measures don't cause another great depression.

Seems like a lot of economic Jenga blocks being removed, with potentially very bad consequences.

jrs235

Did you say "depression"? Billionaires with assets and money love fire sales! What better way to get even further ahead! Expect a recession or depression. Those coming in don't care about the majority that gave them the only thing they needed (a vote) and only needed it once to further their gains and wealth.

cyberge99

Russia loves this for us.

slackfan

Fantastic for climate.

Twirrim

Yet another attempt to shift tax burdens to the working class. Yay. (/s if that wasn't obvious)

einpoklum

The tax burden in the US already is mostly on the working class. Corporate tax rates were low and were reduced further during Trump's first term - and Biden made no attempt to raise them.

One should also remember that low minimum and median wages are "pre-burdening" the working class, i.e. constitute a different form of tilting the distribution of economic power, and access to goods and services, away from workers. And minimum and median US wages are quite low relative to the wealth of the US as a whole.

riggins

frumper

The first link ignores payroll taxes because it doesn't paint the same picture. The second link seems to show the US tax rates are significantly lower for the upper echelon compared to other first world countries.

nickff

Increasing corporate taxes wouldn't necessarily shift the burden off the working class (though it might). Individuals react to taxes by reducing consumption of 'luxuries', whereas corporations don't experience luxuries, so increases in expenses (including taxes) cause increased prices, reduced wage expenses, reductions in dividends, or reduced capital. Increased prices and reductions in wages (either pay cuts or layoffs) are the most frequent reactions to tax increases, as investors have international alternatives, and so demand maintenance of the value of their asset.

legitster

> The tax burden in the US already is mostly on the working class

Blatantly incorrect. 89% of income tax revenue comes from families making $120k or more.

> Corporate tax rates were low and were reduced further

Corporate income tax is a side show. Most money that doesn't get taxed will get paid out either as purchases, salaries, or returned to investors. So either a sales tax, a personal income tax, or a capital gains tax. So a large cut to the corporate income tax only has a small overall effect on the overall tax burden.

9283409232

Abolishing income tax is secondary to the real goal of abolishing the IRS and handing more power to the oligarchy. Don't get distracted.

Dig1t

The IRS has agents who train with assault rifles. The “oligarchs” do not.

dgrin91

What about all their private security?

9283409232

The oligarchs just call them police officers.

Dig1t

Do the oligarchs control the police force?

Last I checked the government (IRS) had a monopoly on violence.

aurizon

IRS = very crooked. Take gambling and lotteries. We know house = wins. Yet the IRS grabs huge % of lottery winnings, yet does not allow gamblers to deduct their ticket costs = a huge unearned windfall for the IRS. Here in Canada the CRA (functions like IRS) is fair, lotteries are not taxed and thus no deductions for tickets. Seems to be a relic of religious oppression - IHMO

markhahn

Other than lottery winners, who cares? Is there some reason lottery winnings (or other forms of gambling) should be treated gingerly?

aurizon

Not gingerly, just reflect the correct profit/loss = since the house wins, it is a defacto double tax

JojoFatsani

So maybe don’t gamble?

tzs

Lottery ticket costs are deductible, but only up to the amount of your lottery winnings. E.g., if you bought 1000 $1 tickets and won $12000, you could deduct $1000.

gigel82

It works for Somalia, I'm sure we can all strive to get to that level one day.

throw16180339

That's apparently what the majority of the country wants.

jmclnx

This is my expectation if this is signed by the orange idiot.

joecool1029

I upvoted because you were downvoted and I suspect most of HN thinks you are kidding (maybe you are or aren't, please do explain), but it appears like it was only last year they enacted a similar policy: https://somalipublicagenda.org/wp-content/uploads/2024/11/SP...

The US also cancelled a large amount of their debt (previously 96% of the country's GDP was going toward servicing it): https://www.theguardian.com/global-development/2024/nov/06/s...

I don't have any opinion but I do have thoughts about how the US is operating on a very different scale (who will cancel our debt, and at that scale does it matter?).

gigel82

It was tongue-in-cheek but not kidding. Somalia is on a list of only 16 countries in the world without an income tax, all the others have a single industry generating most of the income for the population (tourism or oil).