As Huckabee rises, the FairTax follows

Posted by Brian on December 16th, 2007

For years people like me have been spreading the word about the FairTax on the grassroots level.  The result is that support for replacing the federal income tax with a national consumption tax is broad and deep - especially among the politically engaged.  However, until Mike Huckabee came along there has not been a national figure of import who strongly supported the FairTax and understood why it would help this country dramatically.

Gov. Huckabee’s rise in the polls correlates with increased scrutiny and attacks.  And the same goes for the FairTax since it is a cornerstone of his campaign.  So naturally journalists who have never heard of the FairTax or who have a political ax to grind are attacking it.  The attacks are typically formulaic and betray a serious deficit of understanding of the FairTax, which is regrettable since it is FAR easier to understand than the income tax.  There are also individuals who have long pledged or hinted at their endorsement of one of the other (former) front runners and are troubled by Huckabee’s rise.  These are conservative columnists who, until now, have been receptive or at least indifferent to the FairTax, but now are so desperate to tear down Huckabee that they are attacking a policy position he holds that they would normally agree with (especially if their candidate of choice supported it).

It has opened my eyes to the lack of conviction amongst those guilty of writing hatchet pieces out of spite for a single advocate rather than a genuine dislike of the proposal.  I’ve personally lost a great deal of respect for James Taranto of the Wall Street Journal.   He is an admitted pro-Giuliani writer who has engaged in a rash of genuinely sophomoric attacks that are well below his normal standard, apparently as an attempt to (unsuccessfully) build a protective hedge around his preferred candidate.

The first thing everyone trots out when they attack the FairTax is the tax rate.  Is it 23% or is it 30%?  Then comes other predictable questions and allegations.  It will cause black markets to flourish.  It will kill the housing market.  Who will administer the tax?  It isn’t politically feasible.  Yada, yada, yada.

I’ve personally addressed nearly any question you can think of here if you care to take the time to look through the FairTax category.  I’ve seriously thought about making a flip book so that when someone starts plowing through the standard questions I can just silently flip to the appropriate page.  If I haven’t addressed your particular concern in the past then I would be more than happy to give it a shot.

The good news is that the attacks against the FairTax have been used before against politicians who support the bill.  In some early races those politicians lost or had to temper their support.  But in recent years the support has become broad enough and individuals have become educated enough to fend off the expected attacks.

The most important thing to keep in mind while evaluating the FairTax is - well - nothing.  Keep your mind open.  Don’t fall victim to the “devil you know” argument.  The FairTax can’t be judged in a vacuum; it must be contrasted with the system we currently have.  Pretend that there was no federal income tax today, but due to an insatiable appetite for spending our government had to find additional revenue.  Two options were given to the people: an income tax and the FairTax.

Politician A takes the stage to explain why you should choose the income tax.  As he strides towards the lectern you eye the large men who follow closely with stacks of filing boxes on dollies.  He proceeds to tell you how his plan is to force every family, individual, and business in the country to fill out detailed, extensive paperwork, exposing your most intimate financial information to the government.  He points to the aforementioned boxes and casually mentions that the 50+ thousand pages within provide all the instructions you’ll need to insure compliance.  He can hardly control his joy as he lectures you about all of your undesirable choices and how the malleable code will give him and his ilk considerable leverage over how you live your life.  For some reason, a faint smirk creeps onto the faces of all of the wealthy men and women - the tycoons of industry - in the room.  They see a lush opportunity where well financed lobbyists can ply the legislators with food, drink, and pleasurable activities in order to gain favorable treatment.  The politician, noticing your alarm, attempts to assuage you by noting that there will actually be many types of income taxes and the individual rates associate with each one will seem quite reasonable.  Alas the politician underestimated you and presumed that you couldn’t perform the simple math necessary to realize that all of those different low rate taxes added up to a lot of money.  Politician A makes a last ditch effort to win you over and suggests that instead of a once a year payment when the taxes are due he will arrange a prepayment plan where he takes more than is necessary from every paycheck and then at the end of the year (after you fill out the gobs of paperwork) he will graciously refund you the difference - without interest of course.

After watching Politician A get booed off the stage, Politician B stands before the crowd.  He proposes a simple plan, one that will raise as much revenue as that proposed by Politician A, but without a heavy burden on your life.  He pulls a svelte binder out of his briefcase and explains that his plan is defined in full between its covers.  The plan calls for a single rate tax to be applied just once to all new goods and services.  Unlike his competition’s plan, this consumption tax doesn’t increase the cost of American exports and put products made in the USA at a disadvantage around the world.  He admits that his plan has no levers that can be used to manipulate the actions of the free people in this country.  The lobbyists in the room - already on their third celebratory drink after hearing Politician A - suddenly become very quiet.  They strain to figure out how to find loopholes in this plan.  Politician B pulls a small card with a few blanks out of his pocket and announces that it represents the sum total of all the paperwork that individuals in the country will have to complete.  Someone in the room complains about the poor bearing the brunt of the tax, to which the politician coolly announces that not person in the country will have to pay taxes on the essentials of life.  The lobbyists, hoping to have their client’s products categorized as an “essential of life,” begin to perk back up.  Their joy is short lived as the politician continues that his plan includes a monthly “prebate” equal to the amount of taxes a poverty level family would pay if they spent all of their money on taxable items.  As the smattering of applause crescendos into a thunderous cacophony Politician B confidently exits the stage.

Now that might be a bit dramatic, but I think it is a fair representation of how the two tax systems would be received if they were laid out as choices.  The only difference is that the income tax has been around for a little under 100 years and people are familiar with it.  Don’t let the familiarity cloud your judgment.

I would be remiss if I didn’t point out that here in Alabama proponents of rewriting our constitution constantly scold others for blindly trusting “the devil you know.”  Ironically, some of those same people seem eager to rush to judgment against the FairTax because they perceive it as an ideologically biased piece of legislation.  At least in the case of the FairTax you can take the time to read the copious research and debate the intricacies of the bill if you are so inclined.  In the case of rewriting the constitution there is no given as to what it will look like after being rewritten.  It is a true unknown and much more worthy of skepticism than a plan that is in writing and can actually be evaluated on its merits.

A FairTax rebuttal

Posted by Brian on December 5th, 2007

At my request a skeptic of the FairTax laid out the following complaints:

It is a 30% sales tax not 23%.

Retirees will see a drop in their purchasing power due to double taxation on savings. Paid income tax on wages then 30% sales tax.

The IRS will not go away, who will register the the citizens for the prebate, and administer and collect the sales tax.

High Rates and no withholding will encourage tax fraud.

There will be a negative affect on homeownership due to new sales tax and no interest deduction.

The underground economy will flourish and their [sic] will be no need for criminals to launder money because there is no reporting requirement for income.

Instead of just leaving a comment for only the other individual to read I thought I would post my lengthy response here as well.  Chime in.  I enjoy the dialog.

—–

Wow, you just named off most of my favorite standard complaints.  My absolute favorite is the 23/30% one.  I’m on record as stating that I would have preferred if the FairTax creators used the 30% rate, but I understand their rationale for using the 23% rate (it makes for an apples-to-apples comparison with income tax rates, which are also calculated on an inclusive basis).  The bigger point that should be considered is that since the FairTax is designed to be revenue neutral the tax rate “is what it is.”  If it seems high that is merely a reflection of how high federal taxation is on us, but it is obfuscated by splitting it into multiple taxes.

The second one is the most valid criticism, but is only partially true.  Retirees, and all consumers for that matter, pay taxes every time they make a purchase.  Businesses view taxes (income, payroll matching, etc.) as costs and pass those costs on to consumers.  So, money in the bank will be subject to taxation again, but even with the income tax system some of that money used to purchase items is making its way into federal coffers through an intermediary.

FairTax supporters have never implied that there would be no government administration agency to replace the IRS.  The difference between the FairTax administration and the IRS are dramatic though.  The IRS is viewed as little more than a witch hunt organization because the overwhelming complexity of the income tax code (over 50,000 pages) makes it nearly impossible to honestly and accurately determine your tax obligation.  It also encourages “creative” accounting in order to bend the rules in the hopes that the complexity will mask your actions.  The prebate registration is simple: provide the names and social security numbers of each member of the household.  I think there is also a check box certifying that you are not an inmate.

Another key difference is the number of tax collection points.  With the income tax the IRS must collect from (and occasionally audit) every business and individual/family.  And remember, many tax remitters have complicated returns that are difficult to audit.  With the FairTax only businesses are tax remitters (i.e. fewer entities to audit).  Plus these audits will be much simpler than poring over reams of income tax forms (GE recently filed a 24,000 page return).

Simplifying the tax system not only aids in auditing, but it also discourages fraud.  Yes, the propensity to cheat is proportional to the tax rate.  But, the propensity to cheat (or inadvertently make errors) is also proportional to complexity.  The current tax gap, the amount that should be paid in income taxes, but is not, is estimated to be as high as $345 billion.  Keep in mind that total tax receipts in 2005 were just under $2.3 trillion.  That means that people are underpaying by 15%.  Quite a bit of fraud and avoidance.  Note that this does not even include the untaxed underground economy, which is estimated to be somewhere in the neighborhood of $2 trillion.  Most of the underpayment has been attributed to individuals, not businesses.  This is an important finding because under the FairTax only businesses are required to collect and remit the tax.  The vast majority of the revenue will be collected by large companies like Wal-Mart that will not be willing to take the risk of cheating on taxes (remember, they don’t now plus the simplified code combined with greater auditing resources per tax remitter will tamp out a considerable amount of cheating).

States will administer the FairTax and they will get a portion of the proceeds for their efforts.

I’m not sure how no withholding encourages fraud.  While on the topic, withholding is the absolute worst part of the current system.  Just the notion of giving the government an interest free loan is unsettling, but seeing so many uneducated people get excited about giving the government an overly large interest free loan (refund!) is worse.  But the worst aspect of withholding is how it takes the money from you before it reaches your wallet, leaving many to feel that the money they earned was never theirs to begin with.  This enables higher tax rates and politicians know it.

The FairTax will not harm housing at all.  Existing houses have the built a tax component equivalent to the FairTax rate due to embedded costs associated with existing taxes.  As for the mortgage interest deduction, research does not support your claim.  Even California’s Legislative Analyst’s Office suggested that they get rid of their MID because it “did not have a substantial impact on home ownership rates per se.”  I personally believe that the MID contributed to the current subprime crisis by encouraging people on the margins of home ownership, people who often have little experience with complicated financial instruments, to take the plunge and get a big mortgage with little or nothing down.  Hey, interest is tax deductible!

I’ve discussed the black market argument before (I’m auburn305 BTW).

Fred Thompson opts to avoid tax reform

Posted by Brian on November 25th, 2007

Instead of actual tax reform Fred Thompson is proposing to add to the confusion of the income tax with a plan that will likely result in many paying more.  You can  read the gory details at the previous link or here on the so-called Club for Growth’s website.  Thompson’s plan has the usual items that every GOP candidate seems to trot out, but rarely follow through on, like eliminating the death tax and lowering corporate taxes.

The core of his “reform” would be to enact the optional flat tax.  Well, actually Thompson’s plan calls for optional flat taxes, which means that it is not a flat tax - just an alternate tax schedule that would, at least initially, only have two levels.

[Thompson's plan would give taxpayers] the choice of filing under the current system or a flat tax rate of 10 percent for joint filers with an income of up to $100,000 — $50,000 for single taxpayers; and 25 percent on income above these amounts.

Sound’s great, right?  Think again.  Thompson’s plan is like an extension of the standard deduction philosophy.  One of the problems with our unbelievably complicated tax code is that many taxpayers choose to take the standard deduction rather than go through the laborious calculations required to itemize.  Consequently many people overpay the federal government.  If Thompson had his way more people would choose to go the new easy route and pay the optional (not) flat taxes.  Regrettably, many of these individuals will also overpay.  The rest of us who seek to take every action possible to legally minimize our tax bill will still have to do the itemization calculations - and then compare that to the standard deduction - and then compare those two to the optional (not) flat taxes amount.  Three damn calculations in order to determine our minimum tax obligations!  Thompson’s plan offers absolutely no relief from the crushing $265 billion in annual tax compliance costs.

To be fair, Thompson’s plan offers some improvements over the current tax system, but those improvements are fairly modest to say the least.  He had the chance to embrace real tax reform by endorsing the FairTax, which he flirted with early in his unimpressive campaign, but instead he has decided to shuffle things around like a street hustler dealing three card monte.

Let’s compare some of the particulars of Thompson’s plan with the FairTax:

Complexity: Thompson’s plan retains and adds to the current tax code that no one can understand.  The FairTax makes paying exactly what you legally owe a reflexive operation that requires no thought and eliminates inadvertent overpayment.

Corporate taxes: Thompson’s plan finally makes American companies competitive with Europe, but leaves us far behind dynamic, growing economies like Ireland.  The FairTax eliminates corporate taxes, making American based companies the most competitive in the world and luring many companies to our shores - and hiring our citizens.

Fairness: Thompson’s plan will continue to prey on those that are too busy to spend hours calculating taxes or not educated enough to navigate through the maze of forms by causing them to overpay.  With the FairTax overpayment is history regardless of your lot in life.

Social engineering:  Thompson leaves the federal social engineering tool of choice intact.  The FairTax makes it impossible for the government to manipulate Americans.

Lobbying reform:  Thompson’s plan keeps the folks on K Street fat and happy.  The FairTax sends them packing.  The government will no longer pick winners and losers at the behest of high paid schmoozers with the FairTax.

I could go on and on…

This is just one more disappointment in the candidacy of Fred Thompson.

FairTax keeps gaining momentum

Posted by Brian on November 4th, 2007

The FairTax movement is continuing to sweep across the country.  The total number of co-sponsors in the House is up to 68 plus Rep. Linder, the bill’s sponsor.  The most recent addition is Rep. Rodney Alexander (D-LA).

Not surprisingly much of the progress has been made without significant recognition from the media.  A prime example would be the meteoric rise of Mike Huckabee.  The media - always desirous of lumping candidates into tidy little boxes - has presumed that his support is coming solely from “values voters” who are smitten by his silver tongued delivery and solid religious underpinnings.  They are forgetting or ignoring that one of the primary reasons for Huckabee’s strong showing in the Iowa straw poll was due to FairTax supporters converging on Ames and casting votes for the most vocal proponent of real tax reform.

Presidential candidates have repeatedly commented on the fervor of FairTax supporters and their propensity to come out in force at nearly every stop.  A friend of mine who recently went to a football game at his alma mater in Clemson, SC remarked on the overwhelming number of FairTax (and Ron Paul) advocates who spreading the word to the masses.

Here in Huntsville the FairTax movement is also strong.  We’ve managed to garner enough interest to have FairTax.org hold a volunteer training session in Huntsville on Nov 17 (click here for details).  Over the past few years supporters have canvassed the 5th Congressional district, represented by Bud Cramer, and have gotten thousands of petition signatures.  The only announced challenger for Rep. Cramer’s seat is a supporter named Ray McKee who tired of hearing excuses for why Cramer wouldn’t co-sponsor the FairTax and decided to run against him.

For those of you in the Huntsville area tune in to the aptly named Dale Jackson Show on WVNN (92.5 FM/770 AM) on 11/6 and 11/15 at 7:30 to hear Mike Frederick, the Alabama FairTax Volunteer Director, talk about (what else) the FairTax.

Real tax reform is within our reach…

Huckabee on the rise

Posted by Brian on August 6th, 2007

From the Politico:

Going into Sunday’s Republican presidential debate, most of the Iowans noshing on English muffins in the sun room of the neon-bedecked Drake Diner had never heard of Mike Huckabee, or knew very little about the ex-preacher and former governor of Arkansas.

But by the debate’s end, they knew a lot more — and liked what they saw.

“Huckabee is hitting it out of the park with these people,” Luntz, a Fox contributor, said as he listened to comments from this small but influential group of voters, whose reactions will be featured on Fox News.

Their reasoning — he was appealing because he seemed like a non-Washington, regular guy — may sound a wake-up call for the leaders in the race.

The Huckabee campaign also was buoyed by a new Washington Post/ABC News poll that shows him tied for fourth with Arizona Sen. John McCain, a rare chance for the former governor to savor the rarified air toward the front of the pack.

I must admit that I have been largely impressed with Huckabee’s performance in all the debates.  The man has a knack for saying the right thing and delivering his message effectively, often with disarming, folksy humor.  The best part?  He is a big FairTax supporter.  Just watch the following segment, which deals exclusively with tax issues, from the most recent GOP debate.

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Mike Huckabee “gets it.”  Giuliani, McCain, and especially Romney don’t.  They want to nibble around the edges of the current tax code - quite possibly making it even more complex in the process.  Clearly they lust for the power that lording over a pliable social engineering tool like our income tax offers.  It’s too bad Stephanopoulos didn’t get around to asking Ron Paul about his tax position; he has the best plan of all.

A FairTax wake-up call

Posted by Brian on July 23rd, 2007

Attention all politicians: the FairTax is becoming increasingly popular.  Look at what happened in the Georgia congressional district previously represented by Charlie Norwood, who died in February.

Poorly funded physician Paul Broun Jr. scored a shocking 50.4% victory over former state Sen. Jim Whitehead, the establishment’s consensus favorite. Columnist Robert Novak says Dr. Broun’s victory has “terrified those incumbent Republican House members who had thought themselves safe for re-election in 2008″ primaries.

Adopting the FairTax was one of Broun’s signature issues.  A former editorial page editor for the Augusta Chronicle said that Broun’s victory should be a “wake-up call” for the party’s establishment.

Personally, I think that if the GOP wants to retain the White House - and possibly win back some seats in Congress - they will have to promote big ideas that excite voters.  Democrats are touting their own big (and expensive) ideas, but so far none of the leading Republican candidates have carved out a platform embraced by their base.  The solution?  The FairTax.

Fred Thompson is optimally positioned to make the FairTax one of his key policy components.  Because he has delayed his formal announcement for so long he has created the perfect opportunity to make a splashy entrance replete with a concise list of goals that energizes the faithful.

Here in Alabama’s 5th congressional district longtime incumbent Bud Cramer is heavily favored to win another term next year.  However his only announced challenger, Ray McKee, is running with the stated goal of working to implement the FairTax.  McKee is a political outsider who only chose to enter the political fray because Rep. Cramer has refused to endorse or co-sponsor the FairTax.  Without the war chest and name recognition that Cramer enjoys McKee certainly faces an uphill battle, but candidates who support the FairTax have done well nationally and I can personally attest that many in north Alabama strongly support the bill.  We’ll see if he can make the race competitive - or if Cramer will decide to support the FairTax.

Giuliani jeered for opposing FairTax

Posted by Brian on July 9th, 2007

The leading GOP candidates for president have been learning quite a bit about the broad and fervent support that for the FairTax.

First Fred Thompson was quizzed.  He failed, but he’s new to this party so we’ll give him a little more time to flesh out his positions. 

Next Mitt Romney was asked about his position on the FairTax.

Mike Huckabee scored well with the crowd at Saturday’s forum while Mitt Romney, one of the leaders in the GOP race, lost ground when he declined to take a position on whether a national sales tax should replace the income tax. (He said he hasn’t had time to study it. But he’s been saying that for months now and the debate over a national sales tax or a national flat tax is a serious division inside his party.) 

As the author pointed out, he can’t beg for more time.  He’s had time and he should just admit that he simply refuses to endorse real tax reform and that he wants to nibble around the edges of the current system.

Now Rudy Giuliani has been outright “jeered” for refusing to support the FairTax.

Several dozen people jeered when Giuliani, in response to a question, said he would not be in favor of what they call the fair tax.

“I have to study it some more,” the former New York City mayor said. “I don’t think a fair tax is realistic change for America. Our economy is dependent upon the way our tax system operates.”

That last sentence is deeply troubling to me.  He is just as much of a statist as Romney. 

Note to all GOP presidential candidates: your prospective voters want real tax reform.  If you continue to refuse to support the FairTax, then we will continue to refuse to support you.  Ron Paul gets an exemption since his tax policies go well beyond the FairTax, which is a compromise plan aimed at placating a broad swath of people - except politicians who stand to lose power under the FairTax.

Here is a summary of who vocally supports the FairTax among the presidential candidates:

Republicans

  • Mike Huckabee
  • Duncan Hunter
  • Tom Tancredo
  • Tommy Thompson

Democrats

  • Mike Gravel

Fred Thompson gets a FairTax education

Posted by Brian on July 1st, 2007

From Robert Novack’s column:

Dropping into what will be the key state of South Carolina for his prospective presidential campaign, Fred Thompson was ambushed Wednesday by advocates of the ”Fair Tax” plan to repeal the federal income tax and replace it with a national sales tax.

The former senator addressed a Republican state fund-raising luncheon in the state capital of Columbia. He appeared surprised to see more people wearing ”Fair Tax” stickers than ”Thompson for President” badges. He did not seem prepared to answer questions about the sweeping tax reform.

Presumptive President Thompson might want to study up on real tax reform.

Time for a FairTax

Posted by Brian on April 10th, 2007

Tax time is upon us and there is no more fitting time to discuss tax reform.  For nearly 100 years our country has suffered under the yoke of an oppressive tax structure that has affected both individuals and businesses alike.  Initially intended to apply only to the top one half of one percent of wage earners it now reaches down deep into the middle class and even manages to ensnare the poorest workers who don’t even bear any tax liability.  High corporate taxes have provided an impetus for American companies to relocate overseas in more favorable tax climates - taking American jobs with them.  Those who stay place themselves at a competitive disadvantage to many overseas manufacturers due to the embedded cost of corporate taxes in the U.S. that are passed on to the consumers.  There is a better way to raise revenue for our government and it is called the FairTax.

This is an introductory post on the FairTax.  It is intended to be the first of a series of posts that will cover why we need to implement the FairTax.  In subsequent posts I will lay out the case for why we need to make a change.  I’ll cover the drawbacks of the income tax as we know it and contrast it with how the FairTax addresses those problems.  I’ll cover how the FairTax will energize the American economy and turn our country into a tax haven.  Frequently asked questions will be addressed.  Eventually, all of these posts will be consolidated onto a static page so that you may use them as a reference.

So, just what is the FairTax?  It is a bill that has been introduced in both houses of Congress that would replace all forms of federal income tax with a single rate sales tax on all new goods and services.  No products or services are excluded and the tax is only applied once on the retail level (no multiple taxation).

It is a revenue neutral tax, which means that it will raise the same amount of money for the federal government as the income taxes it replaces.  The revenue neutrality is key for two reasons: it means that no programs will lose funding because of the tax change and it specifies the tax rate.  The tax rate under the FairTax is 23% (depending on the calculation method, read on).  If it sounds high, then you should keep in mind that it is simply the true rate of taxation you are already subject to.  All of the income taxes that the FairTax will replace (personal income, corporate income, gift, estate, alternative minimum, capital gains, Social Security, and Medicare taxes) hide the true amount of taxes that are eventually passed down to you and me.  I like to call it death by a thousand cuts.

The tax rate is something of a sticking point for some people and detractors try to use the rate as a weapon, so I like to be forthright.  The people who came up with the FairTax decided to advertise the tax rate on an “inclusive” basis.  This means that the taxes are included in the price you pay.  Sales taxes as we know them are calculated on an “exclusive” basis, which means the tax is added on top of the sales price.  Supposedly it was decided to use the inclusive tax rate of 23% because it makes for a direct comparison to income tax rates since the income tax rates are given inclusively.  It also has the positive side effect of being a smaller number than the exclusive value (something I’m sure the designers of the income tax knew all too well).  When calculated as a traditional sales tax the rate is about 30%.

For example, let’s say you purchase an MP3 player and lay $100 on the counter to pay for it.  Under the FairTax $23 of the $100 you paid (23%) goes to Uncle Sam.  If the FairTax was collected like a traditional sales tax the sales price for the MP3 player would be $77 and you would pay a 30% sales tax of $23, which would add up to $100.  Whether you say 23% inclusive or 30% exclusive you are talking about the exact same amount of taxes paid on a given item.  And keep in mind, you’re already paying that tax rate - you just didn’t know it.

Sales taxes typically take the greatest toll on the poorest citizens, but the FairTax is a progressive tax.  How, you ask?  Well, under the FairTax every legal person and family would receive a monthly “prebate” (a rebate ahead of time) for the amount of federal sales tax that person or family would pay if they earned the poverty level income and spent every penny on taxable goods and services.  For a couple with two children the current poverty level income is $27,380.  If all of that money was spent on taxable items then the tax paid under the FairTax would come out to $525 per month.  That is the amount of money that every two adult, two child family will receive each month to offset the taxes paid on the necessities of life.  Families who scrimp and save and maybe purchase some items used could see their tax rate in the low single digits or even below zero.  Those who live a champagne and caviar lifestyle could see their tax rate approach 23%.

There are too many benefits of the FairTax to list them all in an introductory post.  They include increased transparency and personal financial freedom.  The FairTax is part lobbying reform because lobbyists will no longer be able to have pliable legislators manipulate the income tax code to favor their clients.  Every person and company is treated equally under the FairTax.  You’ll get your whole paycheck without any federal withholding.  That means that you won’t pay your taxes (or rather have your taxes taken from you) months in advance anymore.  The FairTax broadens the tax base by roping in people who earn their incomes through illegal activities, but still spend their illicitly earned money at retail establishments.  There are many more, but I’ll address them later for the sake of brevity.

The FairTax is a real plan that can easily become a reality.  It has been introduced in the House by Rep. John Linder (R-GA) and has 57 cosponsors, including Jo Bonner and Spencer Bachus of Alabama.  It has also been introduced in the Senate by Saxby Chambliss (R-GA) and has three cosponsors there.

Stay tuned as I continue this series.  It may take days or weeks, but I will get it done.  As always, I encourage my readers to feel free to ask questions and/or offer constructive criticism.

Shelby changes opinion on the FairTax

Posted by Brian on February 23rd, 2007

Senator Shelby, a staunch proponent of a flat income tax, has been generally opposed to the FairTax.  Calls and letters to his office would be responded to with generic form letters touting the virtues of his flat income tax proposal.  Apparently the FairTax faithful have worn down his opposition.

Shelby voiced support for the “fair tax” proposal, and said he would support the abolishment of the personal income tax, although he said he doubts either will happen. He said a national sales tax would be fairer than income taxes.

There is hope yet.