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January 31, 2008

The FairTax Campaign Rocks the Boat!

Filed under: Commentary,Opinion — grimgold @ 11:03 am

The FairTax Campaign Rocks the Boat!

What a thrilling time it is as our idea for a better nation finally starts getting traction everywhere.

While those threatened with extinction—federal tax lobbyists and tax policy experts—have begun throwing the kitchen sink at the FairTax, the public is also getting a lot smarter about how the income tax system hurts America.

The Pen is Mightier than the Sword (or the smear)

FairTax supporters have taken up their pens and are commenting online, sending letters to the editor and raising the FairTax flag wherever they can. A few writers have been making a huge difference and every supporter is invited to take up the pen—or the keyboard—and fight for the FairTax.

Every day sees a new letter to the editor or web posting defining the 67,500 pages of income tax regulations, the effects of the current tax system on the “Made in America” label and the benefits of a fair, simple and transparent national tax system.

Tax policy was once the exclusive domain of Washington, DC experts who have jealously guarded their elevated status, spun the truth of how the arcane details of the tax code work, helped Congress hide the real effects and size of federal taxes and stoked the political fires to pit citizen against citizen.

That day is coming to an end because of the FairTax.

They don’t like the idea of a simple tax system, of course, and they don’t much care for citizens learning the “secrets” of the dysfunctional income system. The more educated the public becomes; the harder it is for politicians and their handlers to manipulate the truth–and the more popular the FairTax becomes.

3 Comments

  1. Hey Grim,

    I usually haven’t had time lately to investigate the recent Fairtax arguments so I’m going off of memory. You seem to be fairly knowledgeable about the subject so I was wondering if you could clear up a few questions I have.

    1. What are the workable examples that a consumption tax produces economic growth? The only countries I know of are some of the Balkan states and Iraq. Both adopted a consuption tax at the same time new markets were already being opened.

    2. How does the FairTax not devalue Baby Boomer’s exsisting retirement savings?

    3. Who will enforce a consumption tax? It seems likely that a tax-free black market would emerge. We would need some kind of governtment service that tracks internal revenues.

    Comment by Danger Bear — January 31, 2008 @ 5:35 pm

  2. I’m just waiting for Grimmy to discuss the concept of “regressive taxation.”

    –Volt–

    Comment by Volt — January 31, 2008 @ 7:48 pm

  3. Gov. Huckabee’s advocacy of the FairTax ( snipr.com/irsgone ) is the single most important policy position in this election. Research findings explain why:

    The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces [BHKPT] ( snipurl.com/whatratewks ).

    The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan [THBP] ( snipurl.com/baserate ).

    Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case [THBNP] ( snipurl.com/realwages ).

    The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be [ALM] ( snipurl.com/econbenes ).

    Consumption benefits [ALM] ( snipurl.com/econbenes ) :

    • Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.

    • Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.

    • The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.

    • By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.

    Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system [KR] ( snipurl.com/kotcomparetaxrates ).

    Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively [JK] ( snipurl.com/kotftmacromicro ).

    Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax [THBPN] ( snipurl.com/lessregress ).

    Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20 [THPDB] ( snipurl.com/moregiving ).

    On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base [TBJ] ( snipurl.com/staterates ).

    The FairTax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent [WM] ( snipurl.com/homebenes ).

    ALERT: Kotlikoff refutes Bruce Bartlett’s shabby critiques of the FairTax ( snipr.com/bbrebuke ).

    Comment by Ian — January 31, 2008 @ 8:17 pm

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