LPVA Resolves Support for FairTax Rally

Recognizing that our ideal of reducing the size of the Federal Government to that which can be supported by user fees, tariffs and excise taxes is unattainable, at least until the public attitude regarding the proper role of government has been changed, the LPVA has passed a resolution offered by the Tidewater Libertarian Party to support the campaign to institute the FairTax (www.FairTax.org) as an interim step, and educational tool, toward that goal.

The FairTax, a national sales tax to replace FICA withholding as well as both individual and corporate income taxes, is intended to be revenue neutral in the short term. But, by making the cost of government transparent to the average voter, who currently is unaware of the true cost of government, it will inevitably lead to a gradual reduction in the size, cost, and scope of government.

Though Libertarians have long been aware that corporate and individual income based taxation are inevitably passed along to the consumer in the form of higher prices and fees, this complexity of the economy is seldom appreciated by the average voter.

As people learn that their attempts at transferring the cost of government to corporations and the successful, through a progressive income tax, is, and always has been, a failure, and that Federal spending does have its real impact on their lives at the grocery store and the doctors office, it is unlikely they will continue to view such projects as a $50 million dollar domed rain forrest in Iowa as a good idea.

There is nothing we can do to reeducate the average voter more effectively than to have the cost of government plainly printed on every grocery receipt or hospital bill.

A more immediate Libertarian goal to be realized by the FairTax is to deprive Congress of the power to reward and punish corporate and private decisions though tax policy. Our complex tax code is filled with carrots and sticks to guide us to do as the government thinks best, influencing decisions as private as whether to buy or rent a home and as public as when and how to modernize business facilities. Much of the Congress's power to direct our choices will disappear immediately on the passage of the FairTax.

Passing the FairTax will be an uphill battle, but it is winnable with broad, grassroots support. The LPVA has resolved that Libertarians are encouraged to participate in this effort.

Virginia will hold the first national organizational rally for the FairTax on Saturday, May 1st, from 8 AM to 12 Noon, at the Chesapeake Conference Center, just off I-64 in Chesapeake, VA. National Radio talk show host Neal Boortz will speak, and Congressman John Linder, primary sponsor to HR 25, the FairTax Bill, and maverick Democrat Senator Zel Miller are also expected, as well as national FairTax Director Tom Wright and staffers, who will be there to help us organize the grassroots base in Virginia. Success in the Virginia rally will lead to rallies across the country.

There are few actions we can take that can do more to return this country to it's libertarian principles than this effort to bring clarity and attention to the true costs of Federal spending. We in the Tidewater chapter of the LPVA will look forward to participation by Libertarians across the Commonwealth in this Rally and in the coming campaign to get the IRS out of our lives and the Federal Government out of our wallets.

A Taxreform bump for you all.

If you would like to be added to this ping list let me know.

John Linder in the House & Saxby Chambliss Senate, offer a comprehensive bill to kill all income and payroll taxes outright, and provide a IRS free replacement in the form of a pure consumption tax:

H.R.25, S.1493
A bill to promote freedom, fairness, and economic opportunity by repealing the income tax and other taxes, abolishing the Internal Revenue Service, and enacting a national retail sales tax to be administered primarily by the States.
Refer: http://www.fairtax.org & http://www.salestax.org

What is wrong with a 15% flat tax that everyone pays

150yrs of experience with various forms of income tax including the very first one which was a flat tax _{for about 1 year}.

"A hand from Washington will be stretched out and placed upon every man's business; the eye of the federal inspector will be in every man's counting house....The law will of necessity have inquisical features, it will provide penalties, it will create complicated machinery. Under it men will be hauled into courts distant from their homes. Heavy fines imposed by distant and unfamiliar tribunals will constantly menace the tax payer. An army of federal inspectors, spies, and detectives will descend upon the state."
-- Virginian House Speaker Richard E. Byrd, 1910, predicting the consequences of an income tax.

15% would only replace the income tax but would not do anything to replace the 15.3% FICA taxes on wages.

A "flat tax" is still an income tax, with Congress more than willing to define what "taxable income" is.

and with that you get rid of the IRS

An income tax will always require an IRS to assure the income you declare is accurate. The only way to do that is by audit and government access to individual records and accounts.

"What is wrong with a 15% flat tax that everyone pays and with that you get rid of the IRS.........."

That is too involved a question for me to give you a complete answer in this forum. I will, however, try to give you a brief answer.

First of all, I assume that you are referring to the Armey-Forbes-Shelby Flat INCOME tax which has been proposed for some time. The fact that it is still an income tax means that you still tax people on what they contribute to the economy, rather than on what they take out (consume) from the economy. In addition, you perpetuate the notion that you can define the ever elusive term "taxable income" in a manner that is clear and fair. This flies in the face of roughly 90 years of recent US history. The bulk of the complexity in the tax code is NOT, I repeat NOT due to figuring out what rate to use. The complexity comes from the deductions and the Flat Tax makes minimal reductions there.

The Flat Tax would NOT get rid of the IRS or make a significant dent in the hundreds of billions of $$$ spent annually on compliance costs.

The Flat Tax, because it retains the corporate income tax and payroll taxes, also perpetuates a system in which we handicap our producers and make it difficult for them to compete, not only in foreign markets, but even in our own market. This is one of the major reasons that we have such an influx of imports into our country and an economy that can drive up the Dow but is sorely lacking in job creation.

How's that for a start? Here's a more thorough answer.

http://www.geocities.com/cmcofer/confess.html

This article was written by Dick Armey's former Chief of Staff who, like Mr. Armey is also a trained economist, and who is well versed in both proposals. His conclusion is that the Fair and Flat taxes are similar in many respects, but in every case where there is a difference, the FairTax comes out on top.

Also consider---there are millions of illegals in this country who do not file tax returns, there are those people who get their money by illegal means--who do not file tax returns---and of course there are people who cheat on their taxes----- the sales tax would be from a much broader base--virtually every single person in the country! And don't forget the enormous saving from shutting down the IRS--with their sky high operating budget.

His conclusion is that the Fair and Flat taxes are similar in many respects, but in every case where there is a difference, the FairTax comes out on top.

And why Senator Shelby (The Senate's promoter of the Flat Tax) favors the national retail sales tax over the flat tax as well.

'We know it's not perfect' (Shelby on the Stump in Alabama)

His preference for a sales tax is even greater than the flat tax he has promoted for years

As I understand, in the Streamlined Sales and Use Tax Act H. R. 3184, the states are seeking federal authority to force retailers (in other states) to collect taxes on sales made to inhabitants of their state (i.e. they want retailers to collect sales tax on sales made via the Internet).

Both the house and senate versions of the Streamlined Sales bill have larger cosponsor list than the Fair Tax bills. I make the assumption that this is because they have a larger (state sponsored?) organization pushing their bill.

Since both groups seek a federal sales tax, my overall question is "Is there an opportunity to combine forces?"

But my immediate question is "When a state government does 'harmonize' its tax system with the Fair Tax, does the state then have the opportunity to collect a state tax along with the federal tax on sales and services that cross state lines?"

"And don't forget the enormous saving from shutting down the IRS--with their sky high operating budget."

Actually, costs savings from eliminating the IRS are not among the biggest selling points. I seem to recall that a couple of years ago, Pres. Bush was pushing to increase the IRS's budget to something like $9.5 billion/yr. While that isn't exactly chump change, compared to the federal budget it doesn't move the needle that much. Of course, that doesn't count the fact that the IRS is constantly complaining that they don't have enough resources. Of course, with the 46,000 page monstrosity that not even the experts can understand, there is a lot of validity to their complaint.

Eliminating the IRS would be much more important from the standpoint of restoring the Constitutional freedoms that have been lost. The real savings, however, are in the area of compliance costs. They run in the hundreds of billions of dollars per year (depending on whose estimates you use) and almost all could be saved under the FairTax.

does the state then have the opportunity to collect a state tax along with the federal tax on sales and services that cross state lines?"

No more than they may already have authority to do. Most states now require their residents to pay use taxes on things they purchase out of state now, its just is not very feasible to enforce such provisions.

The FairTax legislation does not address the issue of state taxes on phone/mail/net ordered sales per-se.

If enactment of the "Streamlined Sales and Use Tax Act H. R. 3184" occurs, that becomes a more feasible scenario.

Thanks for the ping.

I'm not opposed to "a" sales tax. I just think it's a little scary to think they have to be so deceitful about what it is, or what it will be, to sell it.

Everyone and anyone who thinks businesses will pay nothing, the government will have the same amount, prices will be lower, every family will get a government check every month and they'll have more money because there's nothing taken from their paychecks would have a rude awakening.

The proposal as written will never happen anyway...If it ever comes up for a vote it wouldn't be recognized.

The FairTax legislation does not address the issue of state taxes on phone/mail/net ordered sales per-se.

The FairTax legislation does seem to leave the door open for the states to make a compact to collect state sales taxes. That is if I'm reading section 402.c correctly.

(c) AGREEMENT WITH CONFORMING STATES- The Secretary is authorized to enter into and shall enter into an agreement among conforming States enabling conforming States to collect conforming State sales tax on sales made by sellers without a particular conforming State to a destination within that particular conforming State.

If enactment of the "Streamlined Sales and Use Tax Act H. R. 3184" occurs, that becomes a more feasible scenario.

As I read it, the stipulation that the states be "conforming" makes the FairTax legislation incompatible with the Streamlined Sales legislation because the states retain control of the definition of taxable property and services in the Streamlined Sales legislation.

I would like to see FairTax enacted and potential problems inherit with Streamlined Sales avoided (example).

If the (state-funded) forces working toward passage of Streamlined Sales could be convinced to work toward passage of FairTax, then both groups may gain.

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