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When Rep. Kevin McCarthy (RCalif.) finally secured the votes necessary to become the next House speaker, it required concessions to dissenters within his party. Members of the House Freedom Caucus demanded, among other things, a vote on the Fair Tax Act, which has been introduced in the current session.

The Fair Tax Act, while likely doomed by a Democratic Senate and White House, represents the first serious challenge to the American tax code in recent memory. Versions of the act have been proposed since at least 1999. While it has never been voted on in the House, it has been endorsed by multiple Republican presidential candidates and Libertarian presidential candidate Gary Johnson.

The bill would overhaul the nation’s entire tax code, scrapping all federal taxes in favor of the FairTax, a 23 percent national retail sales tax. Proponents argue that the 23 percent number is comparable to a 15 percent income tax plus the 7.65 percent payroll tax rate employers pay. In return, taxpayers would keep every cent of their paychecks and only pay taxes on the money they spend.

That shift would have major and immediate consequences. Annual tax returns and W-2s would cease to exist. People who make their money on the black market would be taxed at the same rate as anyone else. The enormous compliance costs currently associated with filing one’s annual taxes would be cut significantly. With only one tax and no deductions, the entire process of funding the government would be more precise and transparent.

There are also tradeoffs. For one, around 40 percent of American households currently pay no federal income taxes, most of whom are in the bottom two-fifths of income earners. Under a FairTax system, those households would marginally increase their take-home pay but take it on the chin at the grocery store.

To account for the regressive structure of a pure consumption tax, the Fair Tax Act provides for a monthly stipend, which supporters call a “prebate.” All American citizens, regardless of need or income level, would receive a “sales tax rebate” to offset their estimated monthly tax liability for essential purchases. Currently, the Social Security Administration dispenses monthly benefits to nearly 70 million people; the Fair Tax Act would increase that number to include every single adult.*

The bill’s sponsor, Rep. Earl “Buddy” Carter (RGa.), said, “Instead of adding 87,000 new agents to weaponize the IRS against small business owners and middle America, this bill will eliminate the need for the department entirely.” Abolishing the IRS is central to FairTax supporters’ message: The cover of 2006’s The Fair Tax Book featured the agency under a red circle-slash.

Under the FairTax, however, another federal agency would have to take its place to adjudicate which purchases qualify. A retail purchase is taxed, but buying manufacturing equipment to produce retail goods is not; if a manufacturer purchases equipment but then later decides to resell it, then that would require a payment of sales tax after the fact. This post hoc transaction would presumably require a central compliance authority similar to the IRS.

The Fair Tax Act is a featured bill in the pantheon of longshot legislation. Even if supporters could get it through both houses of Congress and signed by a president, it couldn’t into effect until the 16th Amendment, which officially gave Congress the authority to tax income, was repealed. Amending the Constitution requires the assent of three-fourths of all U.S. states. The Constitution has not been amended since 1992.

*CORRECTION: Under the FairTax, the prebate would be given to every American.

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Follow live: Panthers, Leafs battle to advance to Eastern Conference finals

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U.S. routs Kazakhstan; into quarters at worlds

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U.S. routs Kazakhstan; into quarters at worlds

HERNING, Denmark — After a goalless opening period, the United States went on to secure its place in the quarterfinals of the ice hockey world championship with a 6-1 rout of Kazakhstan on Sunday.

The Americans are tied atop Group B with the Czech Republic on 14 points, one more than Switzerland. The already qualified Czechs and Swiss have two more games to play in the preliminary round. The U.S. completes the group stage against the Czechs on Tuesday.

“I thought we were ready to play out of the gate,” U.S. head coach Ryan Warsofsky said. “We need to continue to build and get ready for what will be a big challenge on Tuesday against the Czechs.”

Despite an unproductive first period in Herning, the U.S. jumped to a commanding five-goal lead in the second.

Frank Nazar broke the deadlock 6:58 into the period with a shot from the left circle above the glove of Sergei Kudryavtsev. The forward added two assists later in the game.

Defenseman Jackson Lacombe wristed a shot from the blue line through heavy traffic to double the lead with 8:14 to go in the second period.

The next two goals came in a span of 58 seconds.

Forward Tage Thompson scored his fifth at the tournament — after receiving a pass from defenseman Zeev Buium — to make it 3-0 with 6:00 left. Matty Beniers increased the advantage to four from the left circle before Michael Kesselring scored with a high shot from a tight angle from the boards 56 seconds before the end of the period.

U.S. defensive star Zach Werenski skated toward the goal before beating backup goalie Maxim Pavlenko who came on at the beginning of the final period.

Goaltender Jeremy Swayman made 16 saves for the U.S.

In Stockholm, Austria beat Slovenia 3-2 in a shootout to keep alive its hopes of reaching the quarterfinals for the first time. Austria is tied in fourth with Slovakia in Group A.

The top four teams from each group will advance.

Later Sunday, Switzerland meets Hungary in Herning and Slovakia plays Latvia in Stockholm.

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Post-Brexit EU reset negotiations ‘going to the wire’, says minister

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Post-Brexit EU reset negotiations 'going to the wire', says minister

Negotiations to reset the UK’s post-Brexit relationship with the EU are going “to the wire”, a Cabinet Office minister has said.

“There is no final deal as yet. We are in the very final hours,” the UK’s lead negotiator Nick Thomas-Symonds told Sky’s Sunday Morning with Trevor Phillips.

On the possibility of a youth mobility scheme with the EU, he insisted “nothing is agreed until everything is”.

“We would be open to a smart, controlled youth mobility scheme,” he said. “But I should set out, we will not return to freedom of movement.”

Politics latest: PM outlines ‘benefits’ for UK from closer EU ties

The government is set to host EU leaders in London on Monday.

Put to the minister that the government could not guarantee there will be a deal by tomorrow afternoon, Mr Thomas-Symonds said: “Nobody can guarantee anything when you have two parties in a negotiation.”

But the minister said he remained “confident” a deal could be reached “that makes our borders more secure, is good for jobs and growth, and brings people’s household bills down”.

“That is what is in our national interest and that’s what we will continue to do over these final hours,” he said.

“We have certainly been taking what I have called a ruthlessly pragmatic approach.”

On agricultural products, food and drink, Mr Thomas-Symonds said supermarkets were crying out for a deal because the status quo “isn’t working”, with “lorries stuck for 16 hours and food rotting” and producers and farmers unable to export goods because of the amount of “red tape”.

Asked how much people could expect to save on shopping as a result of the deal the government was hoping to negotiate, the minister was unable to give a figure.

Read more:
What could a UK-EU reset look like?
Starmer’s stance on immigration criticised

On the issue of fishing, asked if a deal would mean allowing French boats into British waters, the minister said the Brexit deal which reduced EU fishing in UK waters by a quarter over five years comes to an end next year.

He said the objectives now included “an overall deal in the interest of our fishers, easier access to markets to sell our fish and looking after our oceans”.

Turning to borders, the minister was asked if people would be able to move through queues at airports faster.

Again, he could not give a definitive answer, but said it was “certainly something we have been pushing with the EU… we want British people who are going on holiday to be able to go and enjoy their holiday, and not be stuck in queues”.

PM opens door to EU youth mobility scheme

A deal granting the UK access to a major EU defence fund could be on the table, according to reports – and Prime Minister Sir Keir Starmer has appeared to signal a youth mobility deal could be possible, telling The Times that while freedom of movement is a “red line”, youth mobility does not come under this.

The European Commission has proposed opening negotiations with the UK on an agreement to facilitate youth mobility between the EU and the UK. The scheme would allow both UK and EU citizens aged between 18 and 30 years old to stay for up to four years in a country of their choosing.

Earlier this month, Home Secretary Yvette Cooper told Phillips a youth mobility scheme was not the approach the government wanted to take to bring net migration down.

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Lack of UK training ‘big driver of net migration’

When this was put to him, Mr Thomas-Symonds insisted any deal on a youth mobility scheme with Europe will have to be “smart” and “controlled” and will be “consistent” with the government’s immigration policy.

Asked what the government had got in return for a youth mobility scheme – now there had been a change in approach – the minister said: “It is about an overall balanced package that works for Britain. The government is 100% behind the objective of getting net migration down.”

Phillips said more than a million young people came to the country between 2004 and 2015. “If there isn’t a cap – that’s what we are talking about,” he said.

The minister insisted such a scheme would be “controlled” – but refused to say whether there would be a cap.

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‘It’s going to be a bad deal’

Shadow cabinet office minister Alex Burghart told Phillips an uncapped youth mobility scheme with the EU would lead to “much higher immigration”, adding: “It sounds very much as though it’s going to be a bad deal.”

Asked if the Conservatives would scrap any EU deal, he said: “It depends what the deal is, Trevor. And we still, even at this late stage, we don’t know.

“The government can’t tell us whether everyone will be able to come. They can’t tell us how old the young person is. They can’t tell us what benefits they would get.

“So I think when people hear about a youth mobility scheme, they think about an 18-year-old coming over working at a bar. But actually we may well be looking at a scheme which allows 30-year-olds to come over and have access to the NHS on day one, to claim benefits on day one, to bring their extended families.”

He added: “So there are obviously very considerable disadvantages to the UK if this deal is done in the wrong way.”

Jose Manuel Barroso, former EU Commission president, told Phillips it “makes sense” for a stronger relationship to exist between the European Union and the UK, adding: “We are stronger together.”

He said he understood fishing and youth mobility are the key sticking points for a UK-EU deal.

“Frankly, what is at stake… is much more important than those specific issues,” he said.

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