One of the biggest breaks for crypto could be the possible elimination of the Internal Revenue Service. At least, this is the proposal being pushed by a US lawmaker.
Rep. Earl “Buddy” Carter has sparked controversy with his latest plan to get rid of the IRS and replace the current US tax law with a national consumption tax.
This campaign, known as the Fair Tax Act, seeks to simplify taxation by removing a variety of taxes, including personal and corporate income taxes, payroll taxes, and the death tax. Instead, a single consumption tax would be imposed, substantially altering how Americans pay to federal revenues.
A Bold Move For Crypto & Tax Reform
The Fair Tax Act was introduced on January 9, 2025, and has already received significant attention. Rep. Carter contends that this legislation is more than just a reform; it is a critical step toward tax fairness.
He stated, “The Fair Tax is simply that—fair. It is the only tax proposal available that promotes growth, is straightforward, and lets Americans to keep every penny of their hard-earned money.”
CONGRESSMAN BUDDY CARTER PUSHES TO ABOLISH THE IRS
The FairTax Act of 2025, introduced by Rep. Buddy Carter, proposes eliminating income, payroll, estate, and gift taxes while abolishing the IRS altogether.
In its place? A national sales tax managed by individual states.… pic.twitter.com/bYYDX6owwF
— Mario Nawfal (@MarioNawfal) January 13, 2025
Republican lawmakers have supported the bill. Representatives such as Andrew Clyde and Scott Perry have endorsed Carter’s proposal, sharing his vision of a streamlined tax system that supports economic growth and innovation.
Rep. Clyde underlined that this proposal might reduce the necessity for what he calls a “weaponized IRS,” implying that the existing agency frequently overreaches in its enforcement operations.
Opposition From Democrats
Not everyone, meanwhile, is in favor of this all-encompassing shift. Strong opposition to the Fair Tax Act has been expressed by house Democrats, who regard it as an extreme policy disproportionately affecting working families.
They argue that a national sales tax could lead to a staggering 30% increase in costs for essential goods and services, further straining budgets already stretched thin by inflation and rising living costs.
Democratic legislators have proposed resolutions criticizing this idea and advocating tax cuts to benefit middle-class people. Eliminating the IRS, according to others, will hinder government income collecting and also eliminate important taxpayer rights.
Implications For Cryptocurrency
As the debate over this measure continues, the consequences for cryptocurrencies become increasingly clear. The IRS has struggled to effectively regulate digital currencies, causing confusion among taxpayers in this fast developing sector.
As a number of organizations voice their dissatisfaction with the IRS’s operations, Carter’s Fair Tax Act bill adds to the agency’s mounting criticism. over background, the tax department was recently sued by the Texas Blockchain Council and Blockchain Association over its planned tax gains.
If the Fair Tax Act is passed, it might change the way cryptocurrencies are taxed or possibly omit some of the complexity that currently accompany crypto transactions.
The Fair Tax Act introduced by Rep. Carter represents a bold vision for the future of taxation in America. For the proponents, it is a much-needed reform toward creating a fairer system; however, for critics, this reform would prove disastrous, hurting the common American citizen. Thus, its results in Congress would most probably resonate in various sectors of the economy, including cryptocurrencies.
Featured image from Toptal, chart from TradingView
