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June 5 letter to FactCheck from FairTax COO, David Polyansky

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  • Aaron Schutte
    This letter and our official response to the FactCheck.org article can be found at www.fairtax.org/news_myths_factcheck . -- June 5, 2007 Dear Messrs. Jackson
    Message 1 of 1 , Jun 8, 2007
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      This letter and our official response to the FactCheck.org article can be found at www.fairtax.org/news_myths_factcheck .



      June 5, 2007


      Dear Messrs. Jackson and Miller, and Mss. Novak and Robertson:


      It is hard not to conclude that writer Joe Miller has something besides the plain truth in mind after having spent hours acquainting him with our issue last Friday and hours more in good faith efforts to communicate, point by point, just how unfair he has been in his description of the FairTax in his article entitled “Unspinning the FairTax ,” posted on FactCheck.org on May 31, 2007.  Any reasonable person will conclude, after reading through the specifics, that Mr. Miller based negative conclusions, pejorative in nature, on erroneous assumptions that, in themselves, reveal either a bias or a faulty process of analysis.  I am writing to ask for specific recourse.

      In particular, I am attaching our point-by-point rebuttal to the inaccurate assumptions and factual assertions found in this article and ask that by 2:00 p.m. EDT today FactCheck.org: (i) remove the article from your Web site until we are able to resolve the key errors we have brought to your attention (or at least agree that we cannot reach a resolution); and/or (ii) allow Americans For Fair Taxation/ FairTax .org to post the attached rebuttal next to the FactCheck.org article for the same period of time the at-issue article is available to visitors to your Web site; and (iii) schedule another telephone conference today between us, Joe Miller, and one or more of FactCheck.org’s senior editors to discuss our concerns in greater detail. I would ask that you provide me your response to these requests in writing.


      There is little doubt Mr. Miller has spent much time researching the FairTax , but either because he was determined to produce a "gotcha!" piece or because he has a bias of unknown origin, FactCheck.org has now published an unfair and factually inaccurate analysis of the FairTax . This not only puts our honest issue, education, and advocacy efforts (and peer tested scholarship) in the most slanted and negatively subjective possible light but also ultimately reveals something besides a dedication to truth on the part of this writer and, by reflection, FactCheck.org.


      Can this piece, which goes beyond fact finding to highly judgmental and subjective conclusions, really be the measure of fairness that FactCheck.org seeks?

      As a follow-up to our telephone conversation with Mr. Miller on Friday, I want to reiterate our disappointment with what can only be described as an unfair and unsupported analysis of the FairTax Plan.


      In addition to the attached rebuttal document, I would like to list a few key points that have caused me great concern as to whether your writer conducted a fair and impartial review of the FairTax Plan:


      1)                                          As I stated in my May 29, 2007 e-mail to Messrs. Jackson and Miller, Americans For Fair Taxation would make available to your organization the entirety of the $20 million in research that well-respected economists across the country have conducted in review of the FairTax proposal. Mr. Miller dismissed this research out of hand in our last phone conversation with him because it was, in his words, "commissioned," which assumes that the nation’s foremost public finance economists can be swayed by a contract, ignores the fact that most research is commissioned and that all of our research has been subject to critical peer review over many years.


      2)                                          When we asked for research that supports Mr. Miller’s contrary conclusions on several fact subjects, Mr. Miller refused to cite countering research, instead citing unnamed sources and the President’s Advisory Panel on Federal Tax Reform (which has admitted to having never conducted an in-depth analysis of the FairTax Plan and which has refused to share with the public any underlying assumptions and calculations in scoring their own flawed version of a national retail sales tax). 

      And please consider this another request on behalf of Americans For Fair Taxation and our hundreds of thousands of supporters nationwide to provide us with the "research" Mr. Miller relied upon to reach the conclusions stated in this article. Clearly, the citations he points to are not sufficient to come to the assumptions and incorrect conclusions he makes in the article.


      3a)       The most blatant factual error in Mr. Miller’s article is that the one graph and accompanying text in the article that purports to show that the FairTax would raise taxes on all Americans with incomes between $15,000 and $200,000 was produced by the Treasury Department as part of an analysis of a proposal other than the FairTax and is so labeled.  That the graph does not relate to the FairTax is made even more clear in the text of the Treasury study.  The graph looked at a proposal with a different tax base and that did not repeal the regressive payroll tax.  The FairTax repeals the regressive payroll tax.


      3b)       One of the most glaring pieces of evidence of bias in the article was Mr. Miller's assertion that we have misled the public by defining the FairTax rate as 23 percent using the "inclusive" method of calculation. Mr. Miller states that as a result, “many FairTax supporters do not understand that the 23 percent number is tax inclusive.” Notwithstanding our very own explicit notation of "inclusive," he insists that we intend to mislead, even though, as we tried to patiently explain, the coporate tax, individual income tax, capital gains taxes and estate and gift taxes, the flat tax proposal, and every other tax reform proposal introduced uses the exact same method of calculation.

      Mr. Miller goes on to concede that 85 percent of those who wrote to FactCheck.org understood the difference between tax-inclusive and exclusive, and then he tellingly spins the remaining 15 percent who misunderstood as evidence that we have misled the public. He ignored our point to him that numerous places on our Web site and in our materials we define the difference between "inclusive" and "exclusive" and he was similarly unmoved by our honest plea that our only alternative for those seeking a comparison to the present system was to express income tax rates in "exclusive" terms – which we feel would make us subject to the very charges of misleading the public we are now suffering at Mr. Miller's hands. He also seemed unmoved that, in light of his first stated discomfort, we published again in a most visible manner yet another explanation of the different calculation methods on our Web site.


      Doesn’t the fact that 85 percent of the FairTax supporters who contacted FactCheck.org to express their displeasure with the illogical conclusions of the article understood the difference present plain evidence that an overwhelming number of supporters understand the exclusive vs. inclusive rate differences? The only data he uses to justify the statement that most FairTax supporters are unaware of the difference between “inclusive” and “exclusive” taxation nomenclature is the fact that 85 percent of FairTax respondents who made contact with him did understand the difference. How can we – or any other reader when presented these facts – not conclude that Mr. Miller's logic is either flawed or his conclusions fundamentally disingenuous in presentation?

      If in your polling you found the United States Congress had reached an 85 percent approval rating, would you declare that "15 percent of Americans disapprove of Congress?" Certainly not.


      4)         Another explicit example of your unfair presentation of the FairTax is your statement that the only way the FairTax Plan becomes revenue neutral is via an “accounting trick.” We spent a considerable amount of time with Mr. Miller on the phone Friday – even offering to conference in Dr. Laurence Kotlikoff, a respected economist who has written on this very area – in an effort to put Mr. Miller's charges of an "accounting trick” to rest. When he refused this offer, we suggested that he, at the very least, modify his language to more fairly indicate that a difference of opinion on this highly complex subject exists and that Dr. Kotlikoff’s scholarly paper on the subject published in Tax Notes, to date has not been refuted or criticized even by Mr. Miller’s advisor, Mr. Gale, who recently lost a debate at AEI on the subject. We had understood from Mr. Miller that he would, at the very least, use less pejorative language that would indicate a difference of opinion on this subject by experts, but such a change has not been made to the article.


      This unfounded accusation of “trickery” on the part of me, my board of directors, my staff, consulting team, independent researchers, and our hundreds of thousands of supporters nationwide is insulting and without merit and would seem to require of any fair editor the wholesale revision of this section, if not deletion.


      5)         I was stupefied that Mr. Miller did not bother to take the time to investigate our assertion that the President’s Advisory Panel did not conduct an in-depth study of the FairTax Plan itself, but instead based its findings regarding the benefits of a national retail sales tax on a study of a self-created consumption tax plan. While Mr. Miller briefly mentions the fact that the panel failed to release its methodology, why not take the time to investigate our supportable assertion that the presidential panel never conducted an in-depth analysis of the FairTax Plan itself? In fact, I specifically asked Mr. Miller to request clarification on this point from the Treasury Department and/or from members of the 2005 panel – a responsible request that seems to have fallen on deaf ears.


      6)         It is also concerning to me that your organization’s first contact with Americans For Fair Taxation/ FairTax .org regarding your story was merely the afternoon prior to your hoped-for publication date. Certainly it would have been fairer had we been given a greater opportunity to work through Mr. Miller’s questions on the FairTax days in advance – a benefit that was undoubtedly bestowed upon FairTax detractors.   Our sources indicate that some of your “advisors” on this article were contacted about a month ago.


      Gentlemen, I have provided you with a concise rebuttal to many of the glaring inaccuracies and biased commentary found in the at-issue article. This type of unfair writing is inexcusable and does great harm to our honest effort. It is for these reasons and more that I must assure you that we will do what is necessary to make these facts known.


      Therefore, I must once again reiterate my request that you immediately take down the article in question and/or allow us to post our attached rebuttal on your Web site.  Furthermore, I ask that you immediately schedule a time where we can meet with Mr. Miller and a FactCheck.org editor to discuss our stated concerns. 


      Should you not meet this request, I will be posting our rebuttal on our Web site and will publicly release our claims after 2:00 p.m. EDT today. My hope is that we can work towards a fair and amicable resolution of this issue without having to move our conversation to the public forum.


                  I look forward to your positive response to my stated concerns.


      Warmest regards,




      David C. Polyansky

      Chief Operating Officer

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