The Fair Tax Act of 2025, introduced by Rep. Buddy Carter, seeks to replace federal income, payroll, estate, and gift taxes with a national sales tax.
Rep. Earl “Buddy” Carter (R–GA) put forward H.R. 25, also known as The Fair Tax Act of 2025. The bill questions the current U.S. tax law and the way taxes are handled now.
Its goals are to promote freedom, fairness, and economic opportunity. The Fair Tax Act wants to get rid of the taxes on income, wages, estates, and gifts. The act instead suggests putting in place the sales tax.
The bill says that the current Federal income tax slows down the U.S.’s economic growth and foreign competitiveness. It also says that the tax hurts small businesses and farms, lowers Americans’ standard of living, and lowers the rates at which they save and invest.
On top of that, the bill shows how the extra administrative and compliance costs are hurting citizens, both individuals and businesses. The Federal income tax also has problems like invasions of privacy and not being clear about how taxes are calculated.
The Fair Tax Act says that the Social Security, Medicare, and self-employment taxes make it harder for people to find work.
If not, the bill suggests a broad-based national sales tax on all goods and services bought for end consumption. The act wants to tax all things and services used in the U.S. only once. This would stop taxes from being double, multiple, or cascading.
The bill says it will make it easier to save and invest, raise the standard of living for Americans, assist companies, and fix all the problems with the current tax system. There are also notes in the Fair Tax Act about how the government should help the policy change.
Ending the IRS
Getting rid of the Internal Revenue Service is one of the most radical changes that the Fair Tax Act wants to make. The move is meant to free up people from having to deal with too many rules and regulations. Carter says that the new tax system provided by the law gets rid of the need for the IRS.
Taxes should be clear and easy to understand so that people don’t need help from an expert to do them.
A lot of Republican lawmakers back the bill. They are John Carter, Scott Perry, John Rutherford, Warren Davidson, Andy Biggs, Dale Strong, Rich McCormick, Andy Harris, and Andrew Clyde all back it.
The second one said that the act “provides a commonsense solution to get rid of the need for the weaponized IRS, simplify our tax code, and boost economic growth.”
In addition, Rep. Strong says that the suggested tax system will make sure that illegal immigrants pay their fair share of taxes.
The IRS and the crypto community
When the IRS put in place new rules for reporting, on December 28, 2024, the service was sued over those rules. A number of groups, such as the Blockchain Association, the Texas Blockchain Council, and the DeFi Education Fund, have signed the lawsuit.
It is dangerous for the DeFi business to have new reporting rules because they change what a broker is. As of now, the new rules say that DeFi sites are now brokers.
They have until 2027 to give the IRS information about the deal and the money that was made. It is clear from the report that DeFi platforms are not brokers.
This is what makes them special and new. Since they are peer-to-peer, they don’t use agents or other middlemen, so the IRS’s new rules shouldn’t hurt them, but they do.
The plaintiffs say that the rules are against the Constitution and hurt American progress and leadership in the crypto business. They say that if the rules are put into place, many big names in the industry may decide to work in better places instead of the United States.
