FW: [FAIRTAX_DD] Ask Newt
From: Philip Hinson [mailto:PLH001@...]
Sent: Tuesday, May 02, 2006 6:50 AM
Cc: 'WinningtheFuture@yahoogroups.com'; 'asknewt@...'
Subject: RE: [FAIRTAX_DD] Ask Newt
“The other option would be the Tax Choice option. Under this option, based on Steve Forbes' Flat Tax Plan, taxpayers would multiply their taxable earnings by 17% and if the amount of the tax is lower under the Tax Choice Plan than under the current system, then the taxpayer could simply choose to pay the lower tax.”
Mr. Gingrich’s Tax Choice option would seem to have the same defect as Mr. Forbes’ plan, which it is modeled after – it isn’t revenue neutral, which means it will never be seriously considered in congress. That, of course, is a political defect. Among its many economic defects is that it does not address the handicap that the current tax system places on US producers in the increasingly global marketplace. It also apparently ignores the ticking demographic time bomb in SS and Medicare.
In addition, Mr. Gingrich’s most recent entry into the flat tax sweepstakes highlights another major problem the flat taxers have. There isn’t a single, specific proposal which flat taxers rally behind and which represents a consensus of flat tax supporters. There are four flat tax proposals in congress now: three in the senate and one in the house. The house bill is sponsored by Mr. Burgess. It has 5 co-sponsors (unless it has added one in the past few weeks), it is a flat tax option and therefore isn’t revenue neutral. Of the three bills in the senate, only the Shelby bill has any co-sponsors (a grand total of one). Contrary to Mr. Gingrich’s assessment, what the flat tax does NOT need is another version of the flat tax with little or no support in congress or at the grassroots level. Apparently he thinks that calling it the “Tax Choice Plan” rather than the “flat tax” will be helpful in that regard.
Mr. Gingrich’s response also contains a rather blatant contradiction. First, he says “With enough grassroots energy, anything is possible.” Then he goes on to say “My website, newt.org, gets emails everyday from grassroots Fair Tax supporters.” Then he proceeds to ignore those grassroots supporters by introducing a “new and improved” version of the flat tax. It is obvious that Mr. Gingrich, who plays lip service to the importance of grassroots activism, is nevertheless more influenced by the “inside the beltway” types who still cling to the flat tax. Conspicuously absent from his response was any mention of flat taxers sending e-mails into his website. That is because the flat tax is not growing (in any of its vast array of permutations and combinations), even though those who have been doggedly supporting it for years refuse to acknowledge that obvious truth. Perhaps that lack of momentum and grassroots support will be solved by Mr. Gingrich’s newest entry. I, for one, am not holding my breath.
From: FAIRTAX_DD@yahoogroups.com [mailto:FAIRTAX_DD@yahoogroups.com] On Behalf Of fairtaxnow@...
Sent: Monday, May 01, 2006 5:26 PM
Subject: [FAIRTAX_DD] Ask Newt
Each week, this newsletter will feature questions from its readers. Have a question? Send an email to Newt at asknewt@....
A lot of people feel that our federal tax code is overly complicated, burdensome and not equitable for many. We feel that Washington will do nothing about it because of all the special interests that want to be protected within the current tax system. Can we realistically expect a simplification of our current federal tax system? - Bernadette Mussell
Yes we can. With enough grassroots energy, anything is possible.
There are two tax simplification plans that would be a vast improvement over the current system.
The first is the Fair Tax. My website, newt.org, gets emails everyday from grassroots Fair Tax supporters. It is clearly a much better system than the current punitive anti-prosperity tax code we have today. However, because the Fair Tax is a consumption tax and not an income tax, I believe that we would first have to repeal the 16th Amendment to the Constitution -- a daunting challenge -- to eliminate the certainty of being subject to both a consumption tax and an income tax, leaving us in a worse situation than where we are today.
To get to the flatter, fairer, simpler system we want. I think there is a better way. I call it Tax Choice.
The Tax Choice Plan would give each taxpayer the right to choose between two tax options. The first option would be to keep paying taxes under the current set of IRS rules including keeping all the same deductions.
The other option would be the Tax Choice option. Under this option, based on Steve Forbes' Flat Tax Plan, taxpayers would multiply their taxable earnings by 17% and if the amount of the tax is lower under the Tax Choice Plan than under the current system, then the taxpayer could simply choose to pay the lower tax. You can think of this as an Alternative Maximum Tax, with the taxpayer having the right to pay the lower of the two tax calculations.
The vast majority of Americans would opt for the 17% flat tax because, in virtually every case, it will be the lower choice. But if you really want to pay more, that's your choice too.