Americans For Fair Taxation Stories

What Congress Heard from Constituents in 2011: Top 50 Bills in Congress That Garnered the Most Messages to Congress

POPVOX — Tue, 03 Jan 2012 23:58:12 GMT

San Francisco Chronicle

POPVOX, the award-winning online advocacy platform that delivers individuals' messages to Congress, today released a list of the top 50 bills of 2011 -- those that provoked the most messages from constituents to Congress through the site.

Topping the list of legislation was H.R. 3035, the Mobile Information Call Act, with over 10,000 people weighing in against the proposal. Given the large-scale opposition, the sponsor, Representative Lee Terry, pronounced the bill "dead" on December 17.

The "Fair Tax Act" took two spots in the top ten list, with the House version, H.R. 25, ranked second in popularity and the Senate version, S. 13, ranking ninth (both with 80% support.)..

"Until POPVOX, there was no way to get an objective overview of the kinds of messages Congress is hearing," said Marci Harris, CEO of POPVOX and a former Congressional staffer. "People working on the Hill know that what Congress hears from constituents frequently is not about bills grabbing the headlines."

"With POPVOX, our goal is to provide greater transparency and level the playing field so that everyone can access the kinds of advocacy tools once only reserved for the professionals," Harris continued. "POPVOX makes it easy to see what others are saying about what's going on in Congress and be counted."..

The full article is available here.

Gary Johnson's executive style: Put issues first, politics last to get good government

Darren Richardson — Tue, 03 Jan 2012 23:57:38 GMT

All Voices

...Johnson reiterated his support for the Fair Tax and directed people in the audience towww.fairtax.org to learn more. Johnson promised that as president, he would advocate for a complete scrapping of the current U.S. tax code, going so far as eliminating the I.R.S. and ending payroll withholdings. In place of today’s tax system would be a 23 percent consumption tax – dubbed the “Fair Tax” by its supporters -- on all new goods and services.

The consumption tax would be offset by what Johnson terms “prebates,” monthly $200 checks for every American. The annual sum of $2,400 would offset the cost of the consumption tax up to the poverty level, currently calculated at $10,800 for an individual and $22,350 for a family of four...

The full article is available here.

Presidential Candidate Gary Johnson on the economy and taxes

Karl Dickey — Tue, 03 Jan 2012 23:46:04 GMT

Examiner.com

Libertarian Party Presidential Candidate Gary Johnson has put forth a three point plan to get the economy back and taxes simplified...

Second he would cut taxes and work to get the Fair Tax implemented.

Eliminate punitive taxation of savings and investment.
Simplify the tax code; stop using it to reward special interests and control behavior.
Eliminate the corporate income tax so that America will once again be a great place to start a business...

The full article is available here.

Consumption-based tax the fair choice for America

Sally Triolo — Fri, 04 Nov 2011 22:58:29 GMT

The Star-Ledger

...The problem is the entire tax system headed by the IRS. We keep hearing talk about a flat tax being the answer. In truth, that will change nothing. Does anyone realize that the current tax began as a flat tax? What is to prevent any new flat tax from increasing over time?

The answer is the Fair Tax Bill (HR25 and S13) now waiting for passage in Congress. By eliminating the IRS and it’s 79,000 pages of code, and changing from an income-based tax to a consumption-based tax, we all would be paying our fair share by the choices we make in our purchasing decisions.

We would each be in control of the amount of tax we pay and everyone would be paying something.

Sally Triolo, Piscataway

This article can be seen in full here.

Cain Says Long-Term Goal Is Shift to 'Pure Consumption Tax'

Steven Sloan — Fri, 04 Nov 2011 22:55:27 GMT

Bloomberg Bussinessweek

Republican presidential candidate Herman Cain said his so-called 9-9-9 plan is the first step toward an ultimate goal of a “pure consumption tax.”

The 9-9-9 proposal has bolstered Cain’s bid for the Republican presidential nomination. The plan would scrap much of the current tax code and replace it with a 9 percent national sales tax and 9 percent levies on businesses and on individual income.

In a discussion today at the American Enterprise Institute, a Washington group that supports smaller government, Cain framed the 9-9-9 plan as a tool that could bring together advocates of a flat tax and the so-called fair tax, which is a national sales tax. The U.S. then could make the more fundamental shift toward a system that taxes only consumption, Cain said.

“You put the consumer totally in charge for what they pay in taxes based upon their purchasing behavior,” he said. “That’s going to supercharge this economy.”..

This story can be viewed in full here.

Fair Tax is better option than 9-9-9

Florida Times-Union Editorial Board — Sat, 29 Oct 2011 05:56:51 GMT

Florida Times-Union

Herman Cain's 9-9-9 plan is being riddled with criticisms on a bipartisan basis.

Because the plan had not been fully vetted before the presidential campaign, the tax is changing shape and form almost weekly.

The confusion has eliminated the initial strength of the plan - its simplicity.

The plan refers to a 9 percent business flat tax, a 9 percent individual flat tax and a 9 percent national sales tax. It would eliminate a number of current taxes, such as the payroll tax, the inheritance tax and the capital gains tax.

Exemptions include used purchases or charitable deductions. Businesses could deduct new equipment purchases from the corporate income tax.

Cain's campaign website quotes an economist as saying the plan would expand gross domestic product by $2 trillion, create six million new jobs, increase business investment by one-third and increase wages by 10 percent.

That sounds good at first glance, which is probably why Cain has surged in the polls.

But if it pulls in the same amount of revenue - one of many controversies - then who benefits the most? The wealthy would see marginal income tax rates reduced, so the burden would appear to shift to the lower and middle classes.

Informed by the nonpartisan Tax Policy Center that it would raise taxes for 84 percent of the taxpayers, Cain announced it really was a 9-0-9 plan for some, meaning there would be no income tax at all for low-income people who don't pay taxes now.

The Wall Street Journal questioned the national sales tax portion of his plan, noting that even if it is low today, it is likely to be raised tomorrow.

Other critics have referred to it as a 27 percent tax.

And when you add the 9 percent national sales tax to state and local taxes, you come up with some breathtaking totals. At least 12 states would have total sales taxes of 17 percent or more. Four states with no sales tax would start paying one.

Robert Lezner of the Forbes staff called that "ridiculous, unrealistic, stupid and would never pass muster."..

The Fair Tax includes provisions so that low-income people are not penalized, and it can be structured to obtain as much revenue as needed.

The tax reform proposal by Cain that makes the most sense is a revival of empowerment zones.

This favorite device of deceased Republican stalwart Jack Kemp provides important incentives to develop businesses in low-income areas.

As described by Arthur Laffer in The Wall Street Journal, empowerment zones in high poverty areas should include exemptions of payroll taxes, minimum wages would be suspended, regulations minimized and profits would be taxed at one-third the regular rate.

Empowerment zones have the advantage of being tested in real life.

Cain has done a national service by putting tax reform on the table, but his 9-9-9 plan needed to have been vetted long before the presidential campaign.

The Fair Tax makes more sense. And a general lowering of tax rates while removing deductions would do just as much good for the economy.

That is the basic proposal of candidate Jon Huntsman, but his plan, like his candidacy, suffers from a lack of hype or a catchy slogan.

This article can be viewed in full here.

Herman Cain's other tax plan has credibility

Peter Coy — Sat, 29 Oct 2011 05:47:17 GMT

Bloomberg Businessweek

Herman Cain does not believe that his 9-9-9 Plan is the best long-term choice for the U.S. Tax Code. Surprised? It’s right there on his website. The pizza magnate and Republican Presidential candidate sees his triple-9 proposal as an interim fix and advocates another tax plan entirely for the long run. Vows Cain at hermancain.com: “Amidst a backdrop of the economic renewal created by the 9-9-9 Plan, I will begin the process of educating the American people on the benefits of continuing the next step to the Fair Tax.”

If the “Fair Tax” is what Cain really wants, then his supporters and critics should probably be focusing more on it and less on 9-9-9. Formally known as the FairTax (one word), it isn’t perfect, but it’s conceptually sounder than 9-9-9. And it belongs to a class of tax reforms that might do more to achieve what Cain says he wants, which is simplicity, fairness and the potential for boosting economic growth. (Texas Governor Rick Perry tried to one-up Cain on Oct. 19 by promising he would soon announce a flat tax “so simple that even Timothy Geithner can file his taxes on time.”)

The FairTax that’s Cain’s ultimate goal is the creation of Leo E. Linbeck Jr., a wealthy, 77-year-old Houston builder who devised it with some friends in 1996 after commissioning research by economists and consulting focus groups. It’s a straightforward tax on consumption that spares savings, a concept that appeals to economists of various political stripes. It would be imposed as a 30 percent federal retail sales tax that replaces the personal and corporate income taxes as well as the gift, estate, capital gains and payroll taxes. Republicans in Congress have introduced FairTax bills repeatedly without it breaking through; the latest has 66 co-sponsors in the House (including one Democrat) and eight co-sponsors in the Senate.

Cain not only supports the FairTax; he served as a volunteer national spokesman for several years in the 2000s. Linbeck says he hasn’t discussed the 9-9-9 Plan with Cain, whom he calls a good friend, “except to the extent that he sees 9-9-9 as a segue into the FairTax. We didn’t talk about the details. I didn’t see any reason to, frankly.”..

The FairTax has garnered support in conservative economic circles from the likes of Nobel laureate Vernon L. Smith and former Federal Reserve Governor Wayne Angell. But even there, economists — a schismatic bunch — see room for improvement. Laurence J. Kotlikoff, a Boston University economist who is a columnist for Bloomberg View and previously endorsed the FairTax, now proposes what he calls the Purple Tax (a blend of red and blue), a consumption levy that he says cleans up some problems with the FairTax. It taxes the benefits that homeowners get from living in their own homes. That catches people who would shelter income by buying big houses. It also attempts to tax Americans’ consumption abroad. And it would tax inheritances and feature a payroll tax that, in a nod to liberals, exempts the first $40,000 of income and has no ceiling...

The usual rap on consumption taxes is that they are bound to fall more heavily on poor people than the current tax code does. But that flaw can be corrected by paying people a lump sum to lighten the burden. Linbeck’s group, Americans for Fair Taxation, calls it a “prebate,” while Kotlikoff calls it a “demogrant.” Cain’s 9-9-9 Plan doesn’t appear to offer a lump sum, which helps account for its regressivity.This

Why doesn’t Cain go straight to the FairTax, if he thinks it’s a better solution? Richard Lowrie, Cain’s adviser on economic issues, responds in an e-mail saying, “The country is tired of economists passing up something great, while they hold out for their own view of perfect, and in doing so, sentence the country to more of the same.” The tax plan that sounds like a pizza price is, evidently, not going away.

The bottom line: Cain’s 9-9-9 Plan amounts to a 27 percent tax on wages. It isn’t taken as seriously by economists as his less-publicized FairTax.

This article can be viewed in full here.

Fair Tax would solve tax dilemma

Ted Hruzd — Mon, 17 Oct 2011 20:46:37 GMT

My Central Jersey

...Especially today we need to grow our economy. Can tax reform play a role?

Most certainly and via the Fair Tax now in Congress as HR 25. The Fair Tax rewards and encourages economic success and is progressive. It eliminates all federal personal and corporate and payroll taxes; it replaces that with a revenue neutral consumption tax on only new products and services. Rebates are provided to low-income earners. The zero percent corporate tax rate will position the U.S. as an entrepreneurial haven for domestic and foreign investors. More jobs will be created in the U.S. as a result. Furthermore, the Fair Tax eliminates the IRS along with a $430 billion annual burden or almost 3 percent of our economy. Technology is in place for tax collection at point of sales. How much of the $430 billion (total cost of the IRS, plus compliance) contributes to economic growth? Likely none.

Ted Hruzd

MORRIS TOWNSHIP

The full article can be viewed here.

The "Real" Jobs Bill

Paul Livingston — Wed, 05 Oct 2011 16:05:28 GMT

The Florida Times-Union

Support FairTax

Short-term fiscal policies fail to get long term results. We need permanent, pervasive and predictable long-term tax reform.

Want a jobs bill that will work and not cost one penny of government spending or new debt? A program to reverse the outflow of jobs and companies and bring $10-12 trillion of offshore capital to our country?

Then change the tax code and pass the FairTax bill. It's only 133 pages long and replaces the IRS and 70,000 pages of old tax code. You can read it on the Internet.

Scholarly research and studies by noted economists from respected universities have determined under the FairTax plan the economy is 2.4 percent higher in the first year and 11.3 percent higher in the 10th year.

To show your support for the FairTax, add your name to the FairTax national database at www.fairtax.org.

Paul Livingston,

Jacksonville

This article can be found here.

Herman Cain for President: What Are His Positions?

Maggie Astor — Wed, 05 Oct 2011 16:03:07 GMT

International Business Times

…Cain calls his tax proposals the "999 plan," because it would create three flat taxes at a rate of 9 percent. The first would be a 9 percent business tax, which would apply to a business's gross income minus investments, dividends paid to shareholders and purchases from other businesses. The second would be a 9 percent individual tax on gross income minus charitable contributions. The third would be a 9 percent national sales tax, which would pave the way to eventually transition entirely to the "fair tax," or a tax on spending rather than income…

The full article can be found here.

Study the Fair Tax, Mr. Romney, as there will be a test on Tuesday

Dan Mastromarco — Tue, 04 Oct 2011 04:18:02 GMT

The Washington Examiner

At each stump along his campaign trail, former Massachusetts Gov. Mitt Romney, like so many other presidential aspirants, finds himself hounded by Fair Tax supporters. What they seek is a president who supports nothing less than the replacement of the current income tax system with a simple, transparent retail sales tax.

The Fair Tax movement presents such presidential candidates with a choice they would prefer never to make: Pander to the corporate lobbyists on which their campaign contributions depend, or assume the political risk of a new idea that the special interests oppose.

They can either support the best tax system lobbyists can buy, or the best system economists can craft. Being a good politician, Romney has found a way to choose both.

While professing to "like the idea of a consumption tax" that doesn't provide a "windfall" "for the very, very wealthy," Romney lectures the crowds that "studies show [the Fair Tax] tends to lower taxes a lot on high income people, and then raises taxes on middle-income people."

Romney's reading list should include the study by renowned public finance expert Lawrence Kotlikoff of Boston University, entitled, "Comparing Average and Marginal Tax Rates under the Fair Tax and the Current System."

The Kotlikoff study examined 42 hypothetical families, including a middle-aged couple with two children earning $20,000, $70,000 and $500,000 per year. The low-, middle- and high-income couples' Fair Tax rates were determined to be 1.5, 11.6 and 20.5 percent respectively, versus 11.0, 21.3 and 35.6 percent today.

The low-income family received an 86 percent cut in its average remaining lifetime tax rate; the middle-income family a 46 percent cut, and the high-income family a 42 percent cut.

The Fair Tax's progressivity is attributable partly to repeal of payroll taxes middle-income wage earners bear, and to the novel concept that government should not tax us before we have met our own sustenance. The Fair Tax totally exempts from taxation expenditures below the poverty threshold for all households.

But fairness is defined in many ways. Whether taxpayers have more money in their pockets after enactment is one common-sense definition. Another Kotlikoff study shows that low-, middle- and high-income households respectively experience a 26.7, 10.9 and 4.7 percent welfare gain.

Because the Fair Tax untaxes work, savings and investment, but taxes spending, it promotes economic growth, raises marginal labor productivity and real wages, creates jobs and encourages upward mobility. Neither study incorporated the more than $380 billion in compliance-cost savings from the Fair Tax.

Romney has his own tax plan, of sorts, but no one hears mention of studies supporting that plan. That plan consists of maintaining marginal rates at current levels, transitioning to a "territorial" tax system (so manufacturers can outsource and sell their goods back to U.S. consumers with value-added tax rebates), and a pretzeling in of a capital gains tax cut for the middle class (who earn about $400 in capital gains per year).

If such studies existed, they would surely show the Romney plan as regressive, as stifling growth and as adding to complexity.

Fair Tax supporters who hound you, Mr. Romney, do not line the streets of the same Potemkin villages on which past tax reform movements were built. They are not easily shooed away.

Instead, their numbers and energies seem constantly recharged by their unrequited disdain for our broken tax system your plan would only perpetuate. They ask of you one thing. Please read the studies on the Fair Tax before lecturing them on its merits. They have done their homework.

Dan Mastromarco founded the Argus Group, a public policy, law and economic consulting firm, and is a co-developer of the Fair Tax plan.

The full story can be found here.