Is This The End of the IRS?

As I prepare for tax season I try and look over any major and big changes I need to be aware of, and if there is anything I need to talk over with my tax guy. I came across the proposed Fair Tax Act and started thinking to myself, “What would happen if the IRS simply went away? Like vanished?” This sounds crazy, right? It actually might sound like us taxpayer’s wildest dream. However, in 2025, this scenario may not be as far-fetched as you might think. The changes coming to the IRS under the new administration could be nothing short of revolutionary.

A Game-Changing Proposal of The Fair Tax Act

Like me, so many peeps feel the anxiety of tax season? Those late nights sorting through W-2s and 1099s? Well, something called The Fair Tax Act of 2025 might make those feelings and late nights a thing of the past. This groundbreaking legislation, proposes an audacious idea: completely abolishing the IRS!

But here’s where it gets even more nuts – and grabbed my attention. Instead of the intricate web of income taxes we’ve grown accustomed, imagine a single national sales tax. Just imagine paying a premium on your purchases rather than having chunks of your paycheck disappear every month.

Breaking Down the Numbers

Let’s take a look into some specifics. The proposed consumption tax would commence at 23% in 2027, although economists suggest it could potentially rise to around 30%. In practical terms, this means that for every dollar we spend, approximately 30 cents would go towards taxes. As someone who’s always striving to optimize their spending, this has me thinking and reconsider the distinction between consumption and savings.

64.83% would be allocated to general revenue. This portion is the backbone of federal funding and the goal of this allocation is to maintain core federal functions that keep the country running.

27.43% would support old-age, survivors insurance, and disability trust funds. This funding ensures that critical programs supporting vulnerable populations remain solvent and functional. These trust funds are part of Social Security, which provides benefits

7.74% would fund hospital insurance and federal medical insurance programs. This allocation supports Medicare and is vital for sustaining healthcare services for seniors, disabled individuals, and low-income families.

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