Larry Thompson proposes to phase out federal income taxes over four years

By AI, Created 4:30 AM UTC, May 21, 2026, /AGP/ – Republican congressional candidate Larry Thompson on May 21, 2026, unveiled a plan to eliminate federal income taxes for working Americans over four years while protecting major entitlement, defense and veterans programs. The proposal would also ban new government borrowing and require annual deficit cuts until the national debt is paid off.

Why it matters: - Thompson is pitching a broad tax and spending overhaul aimed at middle-class affordability and smaller federal government. - The plan would hit federal revenue, borrowing and the size of the IRS at the same time. - Thompson frames the proposal as relief for workers facing income taxes, inflation and high living costs.

What happened: - Republican congressional candidate Larry Thompson announced the “No Income Taxes for Working Americans” agenda on May 21, 2026. - Thompson said the proposal would phase out federal income taxes over four years. - The plan would protect Social Security, Medicare, national defense, veterans benefits and federal law enforcement. - Thompson also proposed no new government borrowing and mandatory annual federal deficit reduction of 10% until the national debt is fully paid off.

The details: - Federal income taxes would be reduced each year and eliminated within four years through spending cuts, government downsizing, anti-waste measures and mandatory deficit reduction. - The proposal would immediately eliminate federal income taxes on Social Security benefits, tips, overtime pay and the first $250,000 of earned household income. - Protected funding would include Social Security, Medicare, the U.S. military, veterans benefits and services, border security and core federal law enforcement operations. - The plan would require Congress to reduce the federal deficit by at least 10% each year until the national debt is fully paid off. - Under the proposal, Congress would be prohibited from increasing deficit spending. - New borrowing authority would be heavily restricted. - Federal agencies would face annual spending reduction targets. - The reform package calls for independent waste and fraud audits, elimination of duplicative federal programs, sunset reviews for outdated agencies and regulations, restrictions on unelected bureaucratic expansion and congressional accountability reviews for major spending programs. - The proposal would simplify the federal tax system and shrink the size and scope of the Internal Revenue Service as income taxes are phased out. - Thompson said the plan would not replace federal income taxes with a new national sales tax or another federal tax system. - Thompson said the government should rely on tariffs or lower spending if it needs more money. - A copy of Thompson’s proposed bill is available upon request. - Thompson’s campaign website is LarryThompsonForCongress.com.

Between the lines: - Thompson is trying to connect tax relief with fiscal discipline, a message aimed at voters skeptical of Washington spending. - The plan pairs a high-profile tax cut with strict limits on borrowing, which would be difficult to implement without major congressional support. - The proposal’s broad spending restrictions suggest a deeper push to reshape the federal budget, not just cut taxes. - Thompson is also making the case that the tax code itself is too complex and favors bureaucracy over workers and small businesses.

What’s next: - Thompson will likely use the proposal as a central campaign message focused on affordability and economic freedom. - The campaign said additional information can be requested from Larry Thompson For Congress. - Any version of the plan would still need congressional approval and would face major political and budgetary hurdles. - Thompson is continuing to present the proposal as a way to lower costs for workers, retirees and families trying to keep up with inflation.