FAIR TAX TAKES HUGE HIT
For those who have visited this site regularly, you will most likely gather that I am a supporter of The Fair Tax. A consumption tax that eliminates not only all federal payroll taxes including FICA, but because of the elimination of the embedded taxes in consumer goods including housing and automobiles, the consumption tax of 23% will replace the current embedded taxes keeping prices the same while eliminating payroll taxes. As a result incomes will increase and the paying of taxes will be a choice in accordance to our spending habits rather than mandatory taxation every time we earn income.
Government revenues will actually increase while personal income will no longer be taxed from the federal level. It is also speculated that if this tax becomes a reality on the federal level individual states will follow suit as they see the success which will in turn eliminate state payroll taxes and the embedded state taxes in consumer goods, replaced by a consumption tax of a like amount.
The Fair Tax has been gaining momentum in that last several months and has the very distinct possibility of becoming part of the Republican Party platform. Several of the GOP Presidential candidates have either endorsed The Fair Tax or stated that if it passes Congress they would as President sign it into law.
This momentum may have received a damaging blow because of an irresponsible OPED that appeared in The Wall Street Journal last Sunday. The author of the article Bruce Bartlett is a well known writer who leans conservative in most of his OPED's. Bartlett stated in the article that The Fair Tax was first introduced originally by the Church of Scientology in the early 1990's. This is not only a false statement but if one would but do a little simple research the facts would prove that The Fair Tax has nothing to do with the consumption tax introduced by Scientology in the 90's
The Church of Scientology was seeking tax free status as a church from the IRS in the early 90's. The IRS refused to grant them that status and recognize them at least from a taxation stand point as a church. To get even for this lack of recognition Scientologists introduced a consumption tax proposal of 17% as a means of eliminating the IRS as the federal tax revenue department. Their proposal added the consumption tax to all consumer products without eliminating the embedded taxes and also did not eliminate payroll taxes.
The proposal failed but because of this article by Bartlett the stigma of this failed proposal has now been tagged to The Fair Tax. Once again a little simple research would show not only the differences but the fact that The Fair Tax was developed much later than the Scientology proposal and buy a group of economists who spent 22 million dollars researching the best way to repair the tax system. They researched many different models from a flat tax to a revamping of the current system before they came up with The Fair Tax as the best and most efficient way to fix the tax system.
The problem that this article creates for The Fair Tax movement is not that the article was all that powerful in its reach or its content. It is that any candidate who now runs with The Fair Tax as part of his/her platform risks political advertisement from the opposition that will quote, The Wall Street Journal, the nations premiere financial newspaper as saying that The Fair Tax was first introduced in the 1990's by the Church of Scientology, thus placing that same stigma on the candidate.
This one political tactic will be used to turn conservatives away from supporting any candidate who supports The Fair Tax. That fact that this type of irresponsible reporting has appeared is a testimony to how strong the momentum for The Fair Tax has become and that opponents will, as is the case in anything political, say and do anything to stop something they see as a threat.
Those who oppose The Fair Tax see it as a threat because Congress will no longer have the ability because of The Fair Tax to use the increasing of taxes as a means of political maneuvering to increase spending or tack on pork. It is a direct challenge to the unchecked power that the Congress has over the American people and their ability to control and spend our money as they see fit rather than, "we the people, " controlling the income of the government which is how a Constitutional Republic works.
The Fair Tax returns the power of governments income back to the people as we will ONLY pay taxes in accordance to what we spend as consumers. Additionally everyone will be taxed in like manner, rich, poor middle class, tourists and even illegal aliens. The Fair Tax also includes a prebate which reimburses on a monthly basis taxes collected through consumer purchasing of necessities like food, medicine etc. that is based on the income of those who are spending. Thus the poor will receive a larger prebate percentage of their spending than the middle class and so on.
The Fair Tax is the best idea that has come along to repair/replace the current tax system and has a very good possibility of making it to the House floor after the next election. This attack by Bartlett in The Wall Street Journal has the capability of inflicting damage to the movement.
The only way to overcome it is through education of the truth and the voice of the people demanding of their Representatives the passing of The Fair Tax. It is still our country and our government and we, when speaking in a united voice have the ability to move the Congress in the direction that we who ARE the country know that this nation must go.
I believe as do many millions like me that The Fair Tax is that direction as far as the tax system and our individual freedom to control our own income and finances rather than the Congress and the government.
Ken Taylor
Government revenues will actually increase while personal income will no longer be taxed from the federal level. It is also speculated that if this tax becomes a reality on the federal level individual states will follow suit as they see the success which will in turn eliminate state payroll taxes and the embedded state taxes in consumer goods, replaced by a consumption tax of a like amount.
The Fair Tax has been gaining momentum in that last several months and has the very distinct possibility of becoming part of the Republican Party platform. Several of the GOP Presidential candidates have either endorsed The Fair Tax or stated that if it passes Congress they would as President sign it into law.
This momentum may have received a damaging blow because of an irresponsible OPED that appeared in The Wall Street Journal last Sunday. The author of the article Bruce Bartlett is a well known writer who leans conservative in most of his OPED's. Bartlett stated in the article that The Fair Tax was first introduced originally by the Church of Scientology in the early 1990's. This is not only a false statement but if one would but do a little simple research the facts would prove that The Fair Tax has nothing to do with the consumption tax introduced by Scientology in the 90's
The Church of Scientology was seeking tax free status as a church from the IRS in the early 90's. The IRS refused to grant them that status and recognize them at least from a taxation stand point as a church. To get even for this lack of recognition Scientologists introduced a consumption tax proposal of 17% as a means of eliminating the IRS as the federal tax revenue department. Their proposal added the consumption tax to all consumer products without eliminating the embedded taxes and also did not eliminate payroll taxes.
The proposal failed but because of this article by Bartlett the stigma of this failed proposal has now been tagged to The Fair Tax. Once again a little simple research would show not only the differences but the fact that The Fair Tax was developed much later than the Scientology proposal and buy a group of economists who spent 22 million dollars researching the best way to repair the tax system. They researched many different models from a flat tax to a revamping of the current system before they came up with The Fair Tax as the best and most efficient way to fix the tax system.
The problem that this article creates for The Fair Tax movement is not that the article was all that powerful in its reach or its content. It is that any candidate who now runs with The Fair Tax as part of his/her platform risks political advertisement from the opposition that will quote, The Wall Street Journal, the nations premiere financial newspaper as saying that The Fair Tax was first introduced in the 1990's by the Church of Scientology, thus placing that same stigma on the candidate.
This one political tactic will be used to turn conservatives away from supporting any candidate who supports The Fair Tax. That fact that this type of irresponsible reporting has appeared is a testimony to how strong the momentum for The Fair Tax has become and that opponents will, as is the case in anything political, say and do anything to stop something they see as a threat.
Those who oppose The Fair Tax see it as a threat because Congress will no longer have the ability because of The Fair Tax to use the increasing of taxes as a means of political maneuvering to increase spending or tack on pork. It is a direct challenge to the unchecked power that the Congress has over the American people and their ability to control and spend our money as they see fit rather than, "we the people, " controlling the income of the government which is how a Constitutional Republic works.
The Fair Tax returns the power of governments income back to the people as we will ONLY pay taxes in accordance to what we spend as consumers. Additionally everyone will be taxed in like manner, rich, poor middle class, tourists and even illegal aliens. The Fair Tax also includes a prebate which reimburses on a monthly basis taxes collected through consumer purchasing of necessities like food, medicine etc. that is based on the income of those who are spending. Thus the poor will receive a larger prebate percentage of their spending than the middle class and so on.
The Fair Tax is the best idea that has come along to repair/replace the current tax system and has a very good possibility of making it to the House floor after the next election. This attack by Bartlett in The Wall Street Journal has the capability of inflicting damage to the movement.
The only way to overcome it is through education of the truth and the voice of the people demanding of their Representatives the passing of The Fair Tax. It is still our country and our government and we, when speaking in a united voice have the ability to move the Congress in the direction that we who ARE the country know that this nation must go.
I believe as do many millions like me that The Fair Tax is that direction as far as the tax system and our individual freedom to control our own income and finances rather than the Congress and the government.
Ken Taylor
posted by The Liberal Lie The Conservative Truth | 2:20 PM
4 Comments:
Apparently, this type of misinformation is a long-standing tradition by Mr. Bartlett. Witness:
(Paraphrased) Reply by Dan R Mastromarco (LL.M., Taxation, Georgetown, principal in the Argus Group, adjunct professor at the University of Maryland, International Management Program, and research consultant to Americans for Fair Taxation - FairTax.org) to:
"A National Sales Tax Doesn’t Add Up" by Bruce Bartlett, December 29, 1999
Many engaged in true tax reform find Bartlett-type attacks exasperating, if not embarrassing. I'd like to convey perspective of both flat taxers and sales taxers who believe that such attacks are counterproductive, but first provide some political history by which to frame said perspectives.
For years Conservatives have posited that a VAT is bad policy (when liberals were discussing it), fearing it would become additional to an income tax (it was called a "money machine"). Circa 1980, conservative intellectuals touted Hall-Rabushka "subtraction method"[ H-R ] VAT which taxed business value added at the business side and labor value added at the labor side. Unlike European VATs (identical in scope), H-R became favorite of Dick Armey and Steve Forbes. It eliminated steeply progressive tax rates and tax on savings. Because of the prior VAT criticisms, H-R was packaged as the "flat tax" and is sold as an income tax to this day, rather than the VAT that its DNA characterizes it as being.
Some conservative commentators have called for the repeal of the 16th Amendment and for the adoption of the flat tax, (despite the fact that it is styled as a direct tax and could not be adopted with such repeal). Mr. Bartlett has called the national sales tax [ie, the FairTax] a VAT (which it isn't), castigated VATs as evil, and has said that sales taxes have become VATs in Europe (which they didn't). In the next breath, he "throws his arms around" the flat tax (which is a VAT). He quotes Bill Gale that the [FairTax] would have to be imposed at 60 percent, but glaringly fails to recognize that if the two bases are the same, he would have to impose that rate for the flat tax to be revenue neutral. In truth, all economists know that the two plans differ NOT in economic effect or base, but in administration.
An income tax taxes savings and investment multiple times. Both flat tax and FairTax are neutral as to savings and investment, tax income only once, and are both consumption taxes. Both are single rate taxes, have nearly the same base, and would improve the U.S. standard of living. Neither redistributes wealth.
While some have even suggested that hey are the same plans under different names, the flat tax taxes value added at each stage in the production process, but the FairTax prefers to tax it when it is added up at the end and eliminate the need to make everyone a taxpayer and collector.
Substantive commonalities between the flat tax and FairTax doesn't mean that there are NO key political and policy distinctions that could be exploited in pitting one against the other. If FairTax supporters wanted to retaliate in response to the Bartlett-type critique, they would have much material with which to honestly do so:
• The flat tax will make small firms and farmers pay the tax even if they have no profit
• The flat tax is opposed by many small business groups
• The flat taxers implicitly support big government by disguising even more of the overall tax burden as the current law
• The flat tax has been kicking around for nearly 20 years
• The flat tax makes everyone a taxpayer and collector, while the FairTax exempts 115 million filers [2000 figure] from ever having to deal with the IRS
• The flat tax is regressive, but the FairTax would enable everyone to keep his full paycheck.
• The flat tax has not only stalled, it has lost public and Congressional support.
• The FairTax is instantly understood, while even some proponents of the flat tax don’t understand it
• There are no transition rules developed for the flat tax and they would be very difficult to craft
• The flat tax taxes exports and relieves imports from tax
• The flat tax confuses tax reform with temporary tax reduction and makes both twice as hard
• The flat tax retains the entire income tax apparatus which erodes as quickly as you can say, “tax bill”
FairTaxers could advance these truthful points without resorting to bigotry associated with a cultic religious organization. However, for the most part, FairTax supporters have chosen not to attack the flat tax, but rather accentuate the commonalities between the plans - despite the above-noted differences. The reason is that, in the battle for tax reform, the real enemy is our current system.
Income tax advocates look down upon the articles of Bruce Bartlett with smug chortling, as Bruce is doing their work for them. The IRS and the liberals who want an income tax to ensure (1) taxes can be raised without the American people knowing it, and (2) wealth can be redistributed from the middle class to the poor, do not even need to fight us - we're killing ourselves!
Perhaps Mr. Bartlett believes that the flat tax will help elect Republicans, effect tax reform, and provide tax cuts; however, the real effect of his criticism is to divide conservatives, to delay serious national consideration of tax reform, and to fertilize the roots of the income tax.
( Source )
That being said, I must also tell you that Fred Thompson's position on the FairTax is - at best - lukewarm. Mike Huckabee, however has placed FairTax front and center in his platform. He has already shown how to lead by not fearing those demogog's like Bartlett.
Huckabee is an adroit public speaker. He communicates his message in life-like, cogent terms, with compelling examples like the story he told (at the Ames Straw Poll) of what his then-11-yo daughter entered into the "Comments" section of a Visitors Book after visiting the Yad Vashem holocaust museum: “Why didn't somebody do something?”
Very effective. Huckabee is all about calling his listeners to "do something," to awaken them to their own empowerment, and summon them to action in order that "Main Street," and not "Wall Street," will prevail in guarding the values and beliefs upon which the Republic was founded.
Huckabee puts his listeners at ease, and reassures them, articulating clear concepts in a natural, easy style (no doubt something well-cultivated as a pastor). He’s not angry or demanding, like a Ron Paul, nor is he as “rigidly-scripted” as Romney, and his large brown eyes peer through a humble demeanor, drawing a striking contrast to a somewhat mechanical-squinty Brownback. One can easily imagine sitting comfortably with this man over a cup of coffee at the Main Street Cafe.
Most importantly, perhaps, Huckabee convinces many that he is ONE with the FairTax grassroots movement. While many - like Romney, and others, who are invested in the current income tax system - seek to demagog the well-researched FairTax plan, its acceptance in the professional / academic community continues to grow. Renown economist Laurence Kotlikoff believes that failure to enact the FairTax - choosing instead to try to "flatten" what he deems to be a non-flattenable income tax system - will eventuate into an irrevocable economic meltdown because of the hidden aspects of the current system that make political accountability impossible.
Romney's recent WEAK response to FairTax questioning on “This Week with Geo. Stephanopoulos” drew a sharper contrast between Huckabee and all other presidential front-runners who will not embrace it. Huckabee understands that what's wrong with the income tax can't be fixed with "a tap of the hammer, nor a twist of the screwdriver." That his opponents cling to the destructive Tax Code, the IRS, preserving political power of granting tax favors at continued cost to - and misery of - American families, invigorates his campaign's raison d'etre.
Of the FairTax, Huckabee asserts that it's...
• SIMPLE, easy to understand
• EFFICIENT, inexpensive to comply with and doesn't cause less-than-optimal business decisions for tax minimization purposes
• FAIR, FLAT, and FAMILY FRIENDLY, loophole-free, and everyone pays their share
• LOW TAX RATE is achieved by broad base with no exclusions
• PREDICTABLE, doesn't change, so financial planning is possible
• UNINTRUSIVE, doesn't intrude into our personal affairs or limit our liberty
• VISIBLE, not hidden from the public in tax-inflated prices or otherwise
• PRODUCTIVE, rewards - rather than penalizes - work and productivity
A detailed benefits analysis of the plan (from The FairTax Book) explains Huckabee's ardent advocacy:
FOR INDIVIDUALS:
• No more tax on income - make as much as you wish
• You receive your full paycheck - no more deductions
• You pay the tax when you buy "at retail" - not "used"
• No more double taxation (e.g. like on current Capital Gains)
• Reduction of "pre-FairTaxed" retail prices by 20%-30%
• Adding back 29.9% FairTax maintains current price levels
• FairTax would constitute 23% portion of new prices
• Every household receives a monthly check, or "pre-bate"
• "Prebate" is "advance payback" for monthly consumption to poverty level
• FairTax's "prebate" ensures progressivity, poverty protection
• Finally, citizens are knowledgeable of what their tax IS
• Elimination of "parasitic" Income Tax industry
• NO MORE IRS. NO MORE FILING OF TAX RETURNS by individuals
• Those possessing illicit forms of income will ALSO pay the FairTax
• Households have more disposable income to purchase goods
• Savings is bolstered with reduction of interest rates
FOR BUSINESSES:
• Corporate income and payroll taxes revoked under FairTax
• Business compensated for collecting tax at "cash register"
• No more tax-related lawyers, lobbyists on company payrolls
• No more embedded (hidden) income/payroll taxes in prices
• Reduced costs. Competition - not tax policy - drives prices
• Off-shore "tax haven" headquarters can now return to U.S
• No more "favors" from politicians at expense of taxpayers
• Resources go to R&D and study of competition - not taxes
• Marketplace distortions eliminated for fair competition
• US exports increase their share of foreign markets
FOR THE COUNTRY:
• 7% - 13% economic growth projected in the first year of the FairTax
• Jobs return to the U.S.
• Foreign corporations "set up shop" in the U.S.
• Tax system trends are corrected to "enlarge the pie"
• Larger economic "pie," means thinner tax rate "slices"
• Initial 23% portion of price is pressured downward as "pie" increases
• No more "closed door" tax deals by politicians and business
• FairTax sets new global standard. Other countries will follow
While passionately supporting FairTax, Huckabee understands that, if elected President, Congress will have to present the bill for his signature. His call to action goes beyond his candidacy, Main Street will have to demand that their legislators deliver the bill.
I'm in favor of the Fair Tax too, Ken, and certainly hope that most people know the difference between the Flat Tax and the Fair Tax, but I'm not holding my breath.
This is an excellent post! I don't see why the Fair Tax hasn't been adopted. Our tax system is a mess, but I surely don't need to be telling you that. As for Bartlett's article, I think you hit the ramifications of it right on the head. Bartlett's agenda is obviously meant to confuse American voters, and he's probably doing a good job of it. So many people believe everything they read!
My father once told me when I was 14 that I shouldn't believe everything I read, especially in the newspaper. I didn't understand that until I was a bit older but quickly found out as I matured that he was right. Problem is, he was an athiest and a Democrat so I think he should have taken his own advice.
I am all for a Fair tax. Unfortunately, i think the political reality is that it will never had a chance because of the power that Congress would be forced to relinquish. While they could still spend as they wish, they wouldn't be able to pass hidden and excesive income tax provisions each year. The people would be more aware of tax rates and how it affects them each payday.
A couple of years ago when gas prices were high, a local talk show was discussing it and a woman called and was flummoxed at how gas prices were so much lower in one county than in the county next to me. She had no idea about taxes and the various jurisdictions that pass them.
This would be one of the greatest things for the US. I would pay more taxes than I do now, but at least it would truly be my "fair share"!
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