TBO.com - TBO is Tampa Bay Online

We Need A FairTax On Accumulated Ignorance

ADVERTISEMENT

By TOM JACKSON

The Tampa Tribune

Published: August 22, 2008

LAND O' LAKES - As far as Dave O'Neill is concerned, the whole FairTax business was hatched in some Capitol Hill cloakroom as a distraction for what really ails this country, which includes - but is not limited to - insurance companies' failure to pay legitimate claims.

"They say, 'Here's our offer; take it or leave it,'" O'Neill complains.

He's also not happy to the extent that when talk of the FairTax (a proposed national retail consumption tax that would replace all federal taxes on income) muscles into the scene, it detracts from discussions about America's military engagements, citizens without medical care and its neglected industrial base.

Otherwise, the gentleman from Leesburg, a Vietnam-era activist for Ed Muskie and George McGovern distinguished by his steel gray beard, sandals and piercing blue eyes peering from beneath a battered Disabled American Veterans cap, declared himself annoyed by the whole idea of the FairTax. Why, he says, a while back when magazine publisher Steve Forbes and Stanford University economist Robert Hall lay their plan before California accountants asking specific questions, the whole thing unraveled to tatters.

Whether it did or it didn't is open to interpretation. However, what Forbes and Hall tout for the solution to America's current, onerous, anti-competition, anti-employment, anti-growth tax code is not the sales tax Rep. John Linder, a Republican from Georgia, came a-touting Wednesday, but a flat tax, still based on income and still subject to the nibbling of K Street - rent-seeking lobbyists who earn their keep by convincing Congress to choose winners and losers.

The difference that makes all the difference is simple, says Linder: Like the current exasperating code, the flat tax duns income; the FairTax taxes "accumulated wealth."

This explanation seemed to resonate with the 150 mostly senior, mostly supportive folks who stopped by Our Lady of the Rosary Catholic Church to hear Linder's spellbinding overview, especially in light of this eye-popping anecdote: In 2004, when she made her tax returns public during her husband's run for the presidency, Teresa Heinz-Kerry - the ketchup heiress - had more than $5 million in earnings, mostly dividends and capital gains payments. On that income, her tax rate came to 12 percent, about $600,000. Not a dime of it, because it wasn't derived from wages, went toward Social Security or Medicaid.

Now, assume she fed three-fifths of her income into America's retail economy - on houses, furnishings, boats, airplanes, clothes, jewelry, facials, hairdos, high-end mountain bikes or wind-surfing paraphernalia. Under the FairTax, her federal contribution would have been closer to $700,000, with a third of it feeding the country's Social Security and Medicaid obligations.

Fair Shares, Indeed

That got plenty of heads bobbing in the crowd, if not all, and certainly not O'Neill's. Some in the room wanted to turn the session into a critique of U.S. foreign aid, others an assault on pork projects.

"No tax would be a fair tax," huffed someone in a golf shirt in the back of the room. Linder, nodding with good nature, replied, "I'm trying to pass a bill, not make a statement."

A representative from AARP wanted to know what happened to the representative from the other side - someone to argue on behalf of the confusing, favor-granting, exemption-meting, winners-choosing 70,000-page federal tax code, perhaps? Said Linder, "I don't owe you equal time."

Indeed, Linder's assignment - rally supporters and dispel confusion -came at the behest of FairTax co-sponsor Ginny Brown-Waite, the Brooksville Republican whose sprawling congressional district includes all of Pasco east of Little Road. Stepping in for Brown-Waite, whose husband, Harvey Waite, died Tuesday, state Rep. Will Weatherford noted Florida's own ongoing waltz with a FairTax-style revision to revenue collection: the eradication of property taxes in favor of a higher, broader sales tax.

"Obviously, I need to learn more about this," Weatherford said. He does, indeed, if Linder is as much prophet as pitchman: "It's going to happen; whether I'm here or not, it's going to happen."

The former dentist from Duluth, Ga., up Interstate 85 from Atlanta, spent about 25 minutes hitting the high notes, and another 40 fielding questions. Before he vanished out the door to catch a plane, Linder had waxed enthusiastic about the FairTax's projected effect on the American economy (up 10 percent the first year), stock market (up 13 percent), personal disposable income (up 1.7 percent in the first year, up 11 percent against status quo projections by year 10), costs of borrowing (down 30 percent), capital investment (explosive), exports (soaring), capital domestic job conditions (roaring) and workers' paychecks (undiminished by federal deductions).

What Americans Want

Why, then, the resistance in Washington? Understand, first, the shape of the federal mind, which is eager to accede to demands for spending, but loath to spread the burden of payment. "The tax reform acts of 1990 and 1993 were aimed at the top 2 percent of wage earners," Linder said. "And everybody else said, 'Go get 'em.'

" Barack Obama's tax plan promises more of the same.

Understand, second, the implications for increased spending (i.e., vote-buying) if the upshot is having to bump up the tax rate not merely on the anonymous rich guy (also known as your family doctor), but on everyone in the country who earns more than poverty wages.

"I am confident," Linder said, "we have moved the country." Americans for Fair Taxation, linked by Linder's two books on the subject written with radio talker Neal Boortz and the movement's Web site ( www.fairtax.org), number roughly 1 million. "I am not confident," Linder says, "we have moved the government."

That, Linder and Ken Hoagland, the FairTax's Houston-based spokesman, agree, will require an influx of Capitol Hill Democrats. "Not a lot, just a handful," Hoagland says. Maybe one in nine from the House, 25 or so, would do the trick. And with a union such as the International Association of Machinists and Aerospace Workers Union coming on board, as it did with a rare endorsement of a onetime GOP presidential contender - FairTax booster Mike Huckabee - Democrats, especially in the Deep South and industrial Midwest where FairTax fever is rising, may find that attention finally must be paid.

When that happens, even good old Dave O'Neill, facts finally in a row, may get on board.

Tom Jackson can be reached at (813) 948-4219.

Share this:

Loading Comments...

Email Print

ADVERTISEMENT