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This bill imposes a national sales tax on the use or consumption in the United States of taxable property or services in lieu of the current income taxes, payroll taxes, and estate and gift taxes. The rate of the sales tax will be 23% in 2025, with adjustments to the rate in subsequent years. There are exemptions from the tax for used and intangible property; for property or services purchased for business, export, or investment purposes; and for state government functions.

Under the bill, family members who are lawful U.S. residents receive a monthly sales tax rebate (Family Consumption Allowance) based upon criteria related to family size and poverty guidelines.

The states have the responsibility for administering, collecting, and remitting the sales tax to the Treasury.

Tax revenues are to be allocated among

  • the general revenue
  • the old-age and survivors insurance trust fund
  • the disability insurance trust fund
  • the hospital insurance trust fund
  • the federal supplementary medical insurance trust fund

No funding is authorized for the operations of the Internal Revenue Service after FY2027.

the bill terminates the national sales tax if the Sixteenth Amendment to the Constitution (authorizing an income tax) is not repealed within seven years after the enactment of this bill.

the general revenue

The General Revenue refers to the revenue that is collected by the government from various sources such as taxes, fines, fees, and other sources of income. This revenue is used by the government to finance various programs, services, and initiatives, including defense, education, healthcare, infrastructure, and social services.

The General Revenue is distinct from revenue that is dedicated to specific purposes, such as trust funds. For example, the revenue collected by the Social Security Trust Funds is separate from the General Revenue and can only be used to pay Social Security benefits.

The General Revenue is a crucial component of the government’s budget, and its management is an important responsibility of the government. The government uses the General Revenue to fund its operations, invest in infrastructure and social programs, and ensure the well-being of its citizens. The amount of General Revenue collected by the government depends on various factors, including the state of the economy, tax policies, and spending patterns.

the old-age and survivors insurance trust fund

The Old-Age and Survivors Insurance (OASI) Trust Fund is one of the two Social Security trust funds in the United States. It was established by the Social Security Act of 1935 and is funded by payroll taxes from workers and employers, as well as from taxes on Social Security benefits.

The OASI Trust Fund provides retirement, survivor, and disability benefits to eligible workers and their dependents. The Social Security Administration (SSA) uses the revenue collected by the OASI Trust Fund to pay benefits to eligible recipients.

It’s important to note that the OASI Trust Fund is separate from the government’s general fund and can only be used to pay Social Security benefits. The Trust Fund is managed by the SSA and its financial status is monitored by the Board of Trustees, which issues an annual report on the Trust Fund’s financial condition.

the disability insurance trust fund

The Disability Insurance (DI) Trust Fund is one of two Social Security trust funds in the United States. It was established by the Social Security Act of 1935 and is funded by payroll taxes from workers and employers, as well as from taxes on Social Security benefits.

The DI Trust Fund provides disability insurance benefits to eligible workers and their dependents who become unable to work due to a severe medical condition that is expected to last at least a year or result in death. The Social Security Administration (SSA) uses the revenue collected by the DI Trust Fund to pay these benefits to eligible recipients.

Like the Old-Age and Survivors Insurance (OASI) Trust Fund, the DI Trust Fund is separate from the government’s general fund and can only be used to pay Social Security benefits. The Trust Fund is managed by the SSA and its financial status is monitored by the Board of Trustees, which issues an annual report on the Trust Fund’s financial condition.

the hospital insurance trust fund

The Hospital Insurance (HI) Trust Fund is one of two trust funds that make up the Medicare program in the United States. The Medicare program provides health insurance coverage to eligible individuals who are 65 years of age or older, as well as to some individuals with certain disabilities.

The HI Trust Fund is specifically used to finance the Part A benefits of Medicare, which includes hospital insurance coverage. This coverage helps pay for inpatient hospital care, skilled nursing facility care, hospice care, and some home health care. The HI Trust Fund is funded through payroll taxes paid by workers and employers, as well as taxes on Social Security benefits.

The financial status of the HI Trust Fund is monitored by the Board of Trustees of the Medicare program, which issues an annual report on its financial condition. The report includes projections of the trust fund’s future financial status, including estimates of revenue, expenses, and assets.

the HI Trust Fund is an important component of the Medicare program, providing hospital insurance coverage to eligible individuals. The trust fund is funded through payroll taxes and taxes on Social Security benefits, and its financial status is monitored by the Board of Trustees to ensure its sustainability.

the federal supplementary medical insurance trust fund

The Federal Supplementary Medical Insurance (SMI) Trust Fund is one of two trust funds that make up the Medicare program in the United States. The Medicare program provides health insurance coverage to eligible individuals who are 65 years of age or older, as well as to some individuals with certain disabilities.

The SMI Trust Fund is specifically used to finance the Part B and Part D benefits of Medicare, which includes medical insurance coverage and prescription drug coverage, respectively. Part B helps pay for doctor’s visits, preventive services, durable medical equipment, and some home health care, while Part D helps pay for prescription drugs. The SMI Trust Fund is funded through a combination of premiums paid by beneficiaries, general revenue from the federal government, and state payments for Medicaid beneficiaries who are also eligible for Medicare.

The financial status of the SMI Trust Fund is monitored by the Board of Trustees of the Medicare program, which issues an annual report on its financial condition. The report includes projections of the trust fund’s future financial status, including estimates of revenue, expenses, and assets.

In conclusion, the SMI Trust Fund is an important component of the Medicare program, providing medical insurance coverage and prescription drug coverage to eligible individuals. The trust fund is funded through a combination of premiums, general revenue, and state payments, and its financial status is monitored by the Board of Trustees to ensure its sustainability.

Bill Summaries

The proposed bill replaces current income taxes, payroll taxes, and estate and gift taxes with a national sales tax on the use or consumption of taxable property or services in the United States. The rate of the tax will be 23% in 2025, with adjustments in later years. Some exemptions apply, such as for used and intangible property, business purchases, and state government functions.

A monthly sales tax rebate called the Family Consumption Allowance will be given to lawful U.S. resident family members, based on their family size and poverty status. The states are responsible for collecting and remitting the sales tax to the Treasury.

Revenues from the sales tax will be divided among general revenue, the old-age and survivors insurance trust fund, the disability insurance trust fund, the hospital insurance trust fund, and the federal supplementary medical insurance trust fund.

After FY2027, no funding is authorized for the operations of the Internal Revenue Service. The national sales tax will be terminated if the Sixteenth Amendment, which authorizes an income tax, is not repealed within seven years of the bill’s enactment.

the bill proposes a national sales tax on the use of taxable property or services, with exemptions and rebates, and gives the responsibility of collection and remittance to the states. Revenues will be allocated among different trust funds and the national sales tax will be terminated if the Sixteenth Amendment is not repealed.

The bill is expected to have a significant impact on the tax system in the United States, with the introduction of a national sales tax and the elimination of various other taxes. While the monthly sales tax rebate for families may help offset the impact of the sales tax, it remains to be seen how the states will handle the administration and collection responsibilities. The termination of the national sales tax if the Sixteenth Amendment is not repealed within seven years adds an element of uncertainty to the future of the tax system.

It is important to note that this bill is just a proposal and has not been enacted into law. The actual impact of the bill will depend on the final form that it takes if it is passed by Congress and signed into law by the President.

the proposed national sales tax bill has the potential to significantly change the tax system in the United States, with a focus on a consumption tax instead of various other taxes. The impact on individuals, businesses, and the economy will depend on the specifics of the final bill and its implementation.

It’s also worth considering the potential effects of the proposed national sales tax on different segments of the population. Low-income families may be disproportionately impacted by the sales tax, especially if the rebates do not fully offset their consumption. On the other hand, businesses and individuals who purchase items for investment, export, or business purposes may see a decrease in their tax burden.

Additionally, the elimination of the IRS and the responsibility for collection being shifted to the states may lead to complications and discrepancies in the administration of the sales tax. The termination clause in the bill may also create an uncertain environment for businesses and individuals, as it is unclear what the future of the tax system would look like if the Sixteenth Amendment is not repealed.

In the end, it is essential to consider the potential consequences of the proposed national sales tax on various groups and the overall economy. Before any final decisions are made, it is important to weigh the benefits and drawbacks of such a system and carefully consider the implications for all parties involved.