WASHINGTON, DC – House Democratic Whip Steny Hoyer (MD) released the following statement today in opposition to President Bush’s and Republican Leaders’ support for moving to a national sales tax as a replacement for federal taxes:
“If Republicans remain in power after the November elections, President Bush and Republican Leaders plan to push for a national sales tax to replace the current tax system that will result in a huge tax increase on the middle class and elderly. At the same time a national sales tax would impose an enormous tax burden on states and localities which will in turn be forced to cut services or raise property taxes even more on the middle class.
“Even under the best case scenario a national sales tax would mean a 30% tax on everything you buy, including cars, houses, gas and health care. Can you imagine buying an average middle-class house and having to pay $60,000 in taxes? Can you imagine buying a $30,000 car and paying $9,000 in taxes? Or paying $15 more than you already do for every tank of gas you buy? That nightmare would be a reality under President Bush’s and Republican leaders’ plan.
“But in the real world, a national sales tax would result in a 50% tax on everything you buy if the federal government was to break even. Otherwise dramatic cuts would have to be made in Social Security, Medicare and defense spending. Cutting or eliminating domestic programs for education and the environment simply won’t cover the bill.
“By some studies the bottom 80 percent of taxpayers would face an average tax increase of about $3,200 a year.
“Democrats support tax reform that will make the tax system simpler, fairer and more efficient. Middle-class Americans who work hard and play by the rules should not have to hire a tax attorney to pay their taxes, so Democrats propose simple return-free filing. Middle-class Americans shouldn’t pay more than their fair share of the tax burden, so Democrats want to beef up efforts to go after tax cheats and eliminate tax shelters that only benefit the very wealthiest Americans. In contrast, Republicans seem to have forgotten the middle class when it comes to tax reform.”
For more information on Democrats’ tax reform proposals and a report on the Republican sales tax proposal click here.