Essential Goods Tax Relief Act

Purpose:
To provide immediate and ongoing financial relief to working and middle-class families by removing or reducing federal excise and sales taxes on essential goods such as diapers, baby formula, over-the-counter medications, hygiene products, and groceries. This act aims to empower families, reduce the cost of daily living, and promote economic dignity without bloated spending or government overreach.

The Problem:

Inflation has made everyday essentials harder to afford for millions of American families. While luxury goods remain untouched, necessities like infant care products, menstrual hygiene items, and basic household medicine continue to be taxed—adding up to hundreds of dollars in added annual burden per household. This disproportionately impacts:

• Single-parent households (most often headed by women),

• Low-income families,

• Seniors on fixed incomes,

• Parents of young children,

• Working-class households already stretched thin.

The Solution: Essential Goods Tax Relief Act

This legislation would:

1. Eliminate Federal Excise Taxes on Essential Consumer Items

• Diapers, baby formula, and baby wipes

• Feminine hygiene products

• Over-the-counter medicine and first-aid supplies

• Toiletries (soap, toothpaste, deodorant)

• Basic grocery staples

2. Provide a Model for States to Follow

• Incentivize states to align with federal tax exemptions via matching grants or revenue-sharing bonuses for states that reduce or eliminate taxes on these categories.

3. Include Guardrails to Prevent Abuse

• The Treasury Department will publish an annually updated list of qualified "essential goods" based on consumer data, inflation, and public health priorities.

• Prohibit luxury or discretionary products from being miscategorized to prevent loopholes.

How It Works:

• The IRS and Department of the Treasury will revise the federal excise tax code to exempt specific goods in predefined essential categories.

• Consumers will see immediate savings at the point of sale for these products.

• States that opt in to matching policies will receive bonus funding to offset their loss in tax revenue—encouraging broader relief without mandates.

• The legislation will include fiscal impact transparency, ensuring any loss in federal tax revenue is made up through voluntary offsets or programmatic spending reviews—not debt or deficit increases.

Conservative Rationale:

• Tax relief is not welfare—it’s dignity. This policy supports families without expanding entitlements.

• It reduces the cost of living without market interference. No price controls, no bureaucracy—just clean tax relief.

• It strengthens the private economy. When families keep more of their money, they spend it in local businesses and reinvest in their communities.

• It puts government back in its place. Taxing necessities while ignoring government waste sends the wrong message. This act fixes that.

Expected Impact (Key Performance Indicators):

• Annual household savings: An estimated $250–$500 for average households with young children.

• Reduced tax burden: Over $15B in direct consumer tax relief annually if adopted at the federal and state level.

• Improved affordability of early childhood care, elder care, and health maintenance in underserved communities.

Conclusion:

The Essential Goods Tax Relief Act is a family-first, freedom-aligned approach to economic relief. It doesn’t grow government—it shrinks the burden it places on families. In a time of rising prices, we must stop taxing survival.