House Republicans Want a Vote On the FairTax. Is It Worth Supporting?

Published

2 years ago

January 12, 2023

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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.

UK

Protesters throw powder on Tower Bridge during London Marathon

Published

1 hour ago

April 27, 2025

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Protesters throw powder on Tower Bridge during London Marathon

Two pro-Palestinian demonstrators have thrown red powder on Tower Bridge – just moments before leading runners in the London Marathon went past.

The protesters were arrested on suspicion of causing a public nuisance and remain in custody, said the Metropolitan Police.

A video shared by Youth Demand, which is calling for a trade embargo on Israel, shows two people jumping over a barrier that separates spectators from the race course.

The pair, wearing t-shirts that say “Youth Demand: Stop Arming Israel”, are then seen standing in the middle of the road on the bridge.

They throw red powder in the air as an official marathon car goes past displaying the race time.

A motorbike with a cameraman on board continues along the route, while a second motorbike stops and one of the riders gets off and pushes the pair out of the way, just before the men’s elite runners pass.

Several police officers then jump over the barrier and detain the pair, the footage shows.

There appeared to be no impact on the marathon.

More than 56,000 participants were expected to take part in the 26.2-mile race through the capital.

Sabastian Sawe of Kenya won the men’s elite race in a time of two hours, two minutes and 27 seconds, while Ethiopia’s Tigst Assefa shattered the women’s-only world record in two hours, 15 minutes and 50 seconds.

Assefa beat the previous best of two hours, 16 minutes and 16 seconds set last year in London by Kenyan Peres Jepchirchir.

The Metropolitan Police said in a statement: “At around 10.38am, two protesters from Youth Demand jumped over barriers at Tower Bridge and threw red paint on to the road.

“Marathon event staff intervened to remove the protesters from the path of the men’s elite race which was able to pass unobstructed.”

The force added that they were “quickly supported by police officers who arrested the protesters on suspicion of causing a public nuisance”.

The Met said the paint “appeared to be chalk-based” and was not expected to “present a hazard to runners yet to pass this point”.

Business

Chair candidates battle to check in at Premier Inn-owner Whitbread

Published

2 hours ago

April 27, 2025

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Chair candidates battle to check in at Premier Inn-owner Whitbread

Two chairs of FTSE-100 companies are vying to succeed Adam Crozier at the top of Whitbread, the London-listed group behind the Premier Inn hotel chain.

Sky News has learnt that Christine Hodgson, who chairs water company Severn Trent, and Andrew Martin, chair of the testing and inspection group Intertek, are the leading contenders for the Whitbread job.

Mr Crozier, who has chaired the leisure group since 2018, is expected to step down later this year.

The search, which has been taking place for several months, is expected to conclude in the coming weeks, according to one City source.

Ms Hodgson has some experience of the leisure industry, having served on the board of Ladbrokes Coral Group until 2017, while Mr Martin was a senior executive at the contract caterer Compass Group and finance chief at the travel agent First Choice Holidays.

Under Mr Crozier’s stewardship, Whitbread has been radically reshaped, selling its Costa Coffee subsidiary to The Coca-Cola Company in 2019 for nearly £4bn.

The company has also seen off an activist campaign spearheaded by Elliott Advisers, while Mr Crozier orchestrated the appointment of Dominic Paul, its chief executive, following Alison Brittain’s retirement.

It said last year that it sees potential to grow the network from 86,000 UK bedrooms to 125,000 over the next decade or so.

Mr Crozier is one of Britain’s most seasoned boardroom figures, and now chairs BT Group and Kantar, the market research and data business backed by Bain Capital and WPP Group.

He previously ran the Football Association, ITV and – in between – Royal Mail Group.

On Friday, shares in Whitbread closed at £25.41, giving the company a market capitalisation of about £4.5bn.

Whitbread declined to comment this weekend.

Politics

Bitcoin treasury firms driving $200T hyperbitcoinization — Adam Back

Published

3 hours ago

April 27, 2025

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Bitcoin treasury firms driving 0T hyperbitcoinization — Adam Back

Investment firms with Bitcoin-focused treasuries are front-running global Bitcoin adoption, which may see the world’s first cryptocurrency soar to a $200 trillion market capitalization in the coming decade.

Institutions and governments worldwide are starting to recognize the unique monetary properties of Bitcoin (BTC), according to Adam Back, co-founder and CEO of Blockstream and the inventor of Hashcash.

“$MSTR and other treasury companies are an arbitrage of the dislocation between the bitcoin future and todays fiat world,” Back wrote in an April 26 X post.

“A sustainable and scalable $100-$200 trillion trade front-running hyperbitcoinization. scalable enough for most big listed companies to move to btc treasury,” he added.

Hyperbitcoinization refers to the theoretical future where Bitcoin soars to become the largest global currency, replacing fiat money due to its inflationary economics and growing distrust in the legacy financial system.

Bitcoin treasury firms driving $200T hyperbitcoinization — Adam Back — *Source:* *Adam Back*

Bitcoin’s price outpacing fiat money inflation remains the main driver of global hyperbitcoinization, Back said, adding:

“Some people think treasury strategy is a temporary glitch. i’m saying no it’s a logical and sustainable arbitrage. but not for ever, the driver is bitcoin price going up over 4 year periods faster than interest and inflation.”

Back’s comments come nearly two months after US President Donald Trump signed an executive order to establish a national Bitcoin reserve from BTC forfeited in government criminal cases.

Global firms continue Bitcoin accumulation

Continued Bitcoin investments from the likes of Strategy, the largest corporate Bitcoin holder, may inspire more global firms to follow suit.

Strategy’s approach is proving to be lucrative, with the firm’s Bitcoin treasury generating over $5.1 billion worth of profit since the beginning of 2025, according to Strategy’s co-founder, Michael Saylor.

Japanese investment firm Metaplanet, also known as “Asia’s MicroStrategy,” adopted a similar strategy, since surpassing 5,000 BTC in total holdings on April 24, Cointelegraph reported.

As Asia’s largest corporate Bitcoin holder, Metaplanet plans to acquire 21,000 BTC by 2026.

US financial institutions may also have more confidence in adopting Bitcoin after the US Federal Reserve withdrew its 2022 guidance discouraging banks from engaging with cryptocurrency. “Banks are now free to begin supporting Bitcoin,” Saylor said in response to the guidance withdrawal.

“Banks will now be supervised through normal processes, signaling a more open regulatory environment for digital asset integration,” Nexo dispatch analyst Iliya Kalchev told Cointelegraph.