Ron Paul would NOT even Cosponsor "Fair Tax" BillSubmitted by Independent Voter on Thu, 07/29/2010 - 03:06
The so called "Fair Tax" recently sparked my curiosity, when the alleged Libertarian Party of Florida candidate Alex Snitker oddly promoted this un-Libertarian "Fair Tax" on his campaign website.
Fair Tax legislation was originally introduced in Congress by Republican Representative John Linder (R-GA). http://tinyurl.com/FairTaxAct
Linder first sponsored the "Fair Tax Act" in the House claiming it was only 133 pages long, yet in the photo of Representative John Linder the "Fair Tax" document stack is almost as tall as him.
See photo: http://tinyurl.com/FairTaxActLinderPic.
It's also known as H.R.25
Title: Fair Tax Act of 2007
Sponsor: Rep Linder, John [GA-7]
(introduced 1/4/2007) with Cosponsors (72)
Linder's FairTax bill languishes in the House Committee on Ways and Means each time it is introduced, it has always had a number of cosponsors, – but not Ron Paul, the acknowledged taxpayers' best friend.
If the Fair Tax proposal was as friendly to taxpayers as its proponents say it is, I would expect Congressman Paul's name to be first on the list of co-sponsors, but it is not.
It's not just Libertarians who find that the Fair Tax is a fraud.
The pro-libertarian economics Ludwig von Mises Institute published an article titled The Fair Tax Fraud http://mises.org/daily/1814
The article points out that...
The Fair Tax is a fraud because it is based on the fallacy that government theft (taxation) should be done in a "fair" manner instead of eliminated altogether.
Fair Tax advocates claim that their plan would repeal of the 16th Amendment. However, all H.R. 25 does is repeal Subtitle A of the Internal Revenue Code of 1986 that relates to income taxes and self-employment taxes and Subtitle C that relates to payroll taxes and the withholding of income taxes. The only mention of the 16th Amendment in H.R. 25 is when it says: "Congress further finds that the 16th amendment to the United States Constitution should be repealed."
To repeal the 16th Amendment would require a constitutional amendment. Can Congress be relied on to pass a constitutional amendment that repeals the 16th amendment after a national sales tax has already been enacted? And even if Congress passed a constitutional amendment, it would still have to be approved by three-fourths of the states. Without the repeal of the 16th Amendment, what is to prevent an income tax from being imposed again after a national sales tax has been enacted?
Even Congressman Ron Paul fears this could happen,
a National Sales + the Federal Income Tax.
Although the Fair Tax would eliminate the filing of all individual tax returns, the Fair Tax turns every business into a tax collector. Every small service business and every Internet business that does not currently collect state sales taxes will have to collect taxes for the federal government. Every doctor will now have to charge sales tax on his services. Where will this end? Will the neighborhood boy who mows lawns have to begin collecting federal sales tax on each lawn mowed? Will the neighborhood girl who baby sits have to do likewise?
The national retail sales tax rate under the Fair Tax plan rate ranges from 23% up to 30% percent.
That is on top of state sales taxes that are currently collected by forty-five states.
That is on top of the sales tax that many cities and counties also collect.
That is on top of the special taxes that exist on hotel rooms in most areas of the country.
I suppose that a national retail sales tax would also apply to gasoline. There is no mention of the federal gas tax anywhere in the Fair Tax Act.
No list of taxes that are supposed to be eliminated under the FairTax includes the federal gas tax.
Does this mean that there will be an additional 23 to 30% percent tax on each gallon of gasoline?
The "underground economy" that income tax advocates complain about will certainly increase under the Fair Tax system. Even if the highly dubious claim that there will be an "average producer price reduction of 22 percent for goods and services in just the first year after the adoption of the Fair Tax" is true, not having to pay a 23% to 30% percent tax on an item is a tremendous incentive to make a purchase in the "underground economy."
The claim that the IRS will be eliminated under the Fair Tax is bogus.
Although the national sales tax will be collected by the states from retailers, it is still a national sales tax, and as such, its collection will have to be overseen by some agency of the federal government. Just because the bureaucracy will no longer be called the IRS doesn't mean that it will be eliminated.
What is fair about allowing the government to confiscate 23-30% of the value of every new good and service?