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The FairTax Will Never Happen.doc

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  • Jhanson
    I presented this to the East Tennessee Libertarian group on May 13th. It was an adaptation of an article by our own John Linder. Perhaps this will help some
    Message 1 of 1 , Jul 12, 2008
      Upon telling folks about the FairTax bill, they frequently say, “It’ll never happen

      I presented this to the East Tennessee Libertarian group on May 13th.  It was an adaptation of an article by our own John Linder.  Perhaps this will help some of you in presenting the FairTax.


      John Hanson

      Bristol , VA


      Upon telling folks about the FairTax bill, they frequently say, “It’ll never happen.”  This has been the common reaction to every big idea ever proposed in the history of man.  If the FairTax plan is such a great idea, if it is much needed, then why will it never happen?

      Have we become so cynical that we cannot believe that much-needed change is possible?

      Have we come to accept the current tax code as a permanent, immutable part of our lives?


      The FairTax bill would repeal all corporate and individual income taxes, payroll taxes, self-employment taxes, capital gains taxes, death taxes and gift taxes.  They would be replaced with a revenue-neutral, 23% personal consumption tax.  Americans would receive their entire paycheck.  They would have the power to choose exactly when and how much to pay in taxes.  It is in keeping with Libertarian thinking that all taxes should be voluntary and that government should not have the power to confiscate our earnings.

      The FairTax achieves this by offering to every household of American citizens a tax prebate.  The prebate will amount to 23% of the money they spend up to the poverty level.  Families that spend only to buy basic necessities will be tax free because the prebate will cover their taxes every month.  When a rich man decides to buy a new private jet 23% of the purchase price will enter the federal treasury.  America will return to taxing wealth instead of wages. 


      There are many reasons why changing the way we fund our federal government is necessary.  Here are three of the most compelling:


      1)      Our current code is taxing American businesses into a severe disadvantage in competing in the global economy.  Because of  corporate, personal and payroll taxes our businesses have a 22% embedded tax in every good they produce.  Foreign goods do not have this burden and so have a leg up on American industries.  The FairTax will give our industries the best business cost structure in the world.

      2)      Our current code punishes productivity.  On average, Americans lose 33% of their wages to taxation.  The FairTax will unleash the power of the American worker and greatly increase their spendable income.

      3)      Our current code violates the right to privacy of Americans.  The FairTax will restore the privilege of anonymity long cherished but long denied.  Under the FairTax, there will be no more IRS and no reason for the government to know how much you earn and how you spend it.


      Change should be a no-brainer, but the current system is perceived as a constant that has always been and always will be.  The reality is that following the 1894 Supreme Court decision declaring an income tax unconstitutional, it took politicians 19 years to contrive and have ratified the 16th amendment in 1913.  Subsequently, Congress adopted a simple tax code that permitted only a small flat tax on the very wealthy.  This was the beginning of the monstrosity of a code that suffocates American liberty today.


      We can only wonder how many people in 1894 when they heard the idea of an income tax said, “Bad idea, but it’ll never happen.”  How many people hearing in 1895 that all senior citizens would be provided a government pension said, “Great idea, but it’ll never happen.  The Social Security program we have today began in 1896 as the Civil War Pension program.  As all entitlement programs are wont to do, it grew and evolved until it was signed into law as the Social Security Act in 1935.


      The FairTax bill was introduced in Congress in 1999.  It is a big idea and big ideas take time to establish.  Gaining momentum is the greatest challenge to the enactment of the FairTax bill, and there is no greater momentum killer than Congress.  The only antidote to the failure of Congress to act is to let them know the will of the overwhelming majority of American voters.  In just nine years, a grass-roots force of over a million FairTax supporters has been mobilized.  FairTax rallies of over 10,000 Americans have been held, and 72 members of Congress have been persuaded to co-sponsor the FairTax bill.  Most Americans have not heard of the FairTax bill and most politicians probably have not read the bill.  Only by spreading the word on it will the FairTax bill be passed.


      Ronald Reagan touched on the greatness of our country when he stated that the American people have always had the capacity “to do whatever needs to be done to preserve this greatest bastion of freedom.”  We will do this; we will do it because we must if we are to preserve the greatness that generations before us created.  In closing, to those of you out there who say, “great idea, it will never happen,” imagine the dinner table talk when John Kennedy told America we were going to send men to the moon.


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