Leo Linbeck: The short answer to that is when we have the critical mass of membership; when we have 3,000 members in all 435 congressional districts and 10,000 members in the districts in which there is a member of the Ways and Means Committee we will then be in a position to support the action necessary to move the bill through Congress.
Right now we are reasonably short of that goal and it would be a perhaps ill time to ask the leadership in the House to bring it before the Ways and Means Committee because we cannot count the votes on the Ways and Means Committee yet to pass it out of the committee, so it would be a futile exercise and, in my judgment, misdirected to ask that it be put before the Ways and Means Committee and voted out now.
We have to have that critical mass of support at the grassroots level to make known to the Members of Congress that their constituents want this bill to pass, and so until we have that number I think it would be inappropriate and ill advised to insist or ask or in any way put pressure to move it through the Ways and Means Committee, and the same is true obviously in the Senate on the Finance Committee.
Now having said that, we intend to always be available and make known the position of the FairTax any time there is a hearing; we will either try to be a part of that hearing or we will make press releases or have press conferences or otherwise communicate our position where the product of that hearing is contrary to the interest of passage of the FairTax. But that’s quite different than having a concerted effort to pass the FairTax out of the Ways and Means Committee and out of the House before we have the 435 congressional districts up to the full level of critical mass.
I'm not sure if that was FT or some kind of a pseudo-religious Amway sales meeting....
Leo Linbeck:
The most definitive investigation of that issue is still Dale Jorgenson’s research. Although he is not a supporter of the FairTax, he does defend his original research and if you will refer to the Frequently Asked Questions and the research on the Web site you will find that he has broken this down by industry and has given his opinion, his investigatory opinion of what the impact will be on the elimination of the income tax from the cost of producer prices by industry. What it will be on an individual retailer basis in a specific location is very difficult to predict because there are so many variables at work in determining the supply/demand equation and the competitive environment in each individual location. But across the board in a macroeconomic sense, it is my opinion that there will be virtually no upward pressure on prices after the imposition of the FairTax and the elimination of the income tax and it will help, not only at the producer price level, but that translates into an enormous relief of uncompetitive cost structure for our exporters. People like Caterpillar and Boeing, Texas Instruments – people who manufacture products in this country for export – will have relieved from those products the burden of the income tax system that they currently must carry. A good way to look at this is it doesn’t create an advantage for the domestic content product but it removes the impediment that is currently placed on the domestic content product to be competitive internationally. As Denis Calabrese stated and I think most effectively, “You have two runners in a race, one domestic content and the other foreign content. The domestic content in that race is carrying an extra 30 pounds. Under the FairTax they remove that 30-pound weight and both runners are running on the same field of play.” So it is fair. It is even handed. It is not preferential for imports and I believe it will greatly stimulate the creation of domestic content jobsHe didn't answer the question, but that's their story (Jorgenson) and they're sticking to it.
Leo Linbeck:
Well there’s really nothing we can do about the local sales tax through the federal FairTax. We are of the view that the FairTax at the end of the day will not have a significant upward pressure on prices. We believe that there will be a lowering of prices at the producer level in a significant amount and significant enough such that the end result of pricing will not require the Fed to accommodate and that the retail price level will be virtually the same as it is under the current tax system, monetary policy being a constant. But having said that, at the state level unless they reform their state level tax system and in those 45 states that have a sales tax that means that they will have to reform it in a manner that more closely aligns with the base of the federal system and embraces the prebate system as part of its structure and eliminates from its terms taxing business-to-business transactions. In the absence of those kinds of reforms it is my view that the current sales tax system at the state level will, in fact, be an add-on to the federal level. But at the end of the day that is not a net negative impact from where they are today in terms of their state taxes, it’s a virtual push. But I believe that the prospects are very real that upon enactment.That sounds like there's been talk of inflation fears if prices aren't constant...We know they couldn't possibly be constant with pre Fairtax prices.