Let’s talk about taxes: Congressional candidates give their take on tax plans
by Jon Gillooly
April 08, 2014 04:00 AM | 2583 views | 3 3 comments | 8 8 recommendations | email to a friend | print
The six candidates for Phil Gingrey’s 11th District seat in the U.S. House debate at the Cobb Galleria Centre in Atlanta on April 5. They were asked if it is time to give up on the Fair Tax, the proposal that would replace federal income taxes with a consumption tax, which gave the candidates an opportunity to distinguish themselves among their opponents. <br>Staff/C.B. Schmelter
The six candidates for Phil Gingrey’s 11th District seat in the U.S. House debate at the Cobb Galleria Centre in Atlanta on April 5. They were asked if it is time to give up on the Fair Tax, the proposal that would replace federal income taxes with a consumption tax, which gave the candidates an opportunity to distinguish themselves among their opponents.
Staff/C.B. Schmelter
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CUMBERLAND — Is it time to give up on the Fair Tax, the proposal that would replace federal income taxes with a consumption tax?

That’s a question the six Republican candidates hoping to fill the 11th Congressional District seat being vacated by U.S. Rep. Phil Gingrey (R-Marietta) were asked during a debate Saturday.

Kerwin Swint, a political science professor at Kennesaw State University, said while conservatives like to talk about the Fair Tax, realistically it’s not going anywhere, with no movement in Congress.

Many independent analysts, Swint went on to say, from the University of Virginia to a Money Magazine study, have raised serious questions about implementing such a tax.

“Is it time to admit the Fair Tax is not all it’s cracked up to be and move on to more fertile areas of tax reform?” he asked.

Simple Tax for Pridemore

Tricia Pridemore of Marietta, the former executive director of the Governor’s Office of Workforce Development, cited the 74,000-page tax code, which is 185 times larger than it was when the 16th Amendment was adopted in 1913, allowing Congress to levy an income tax. Pridemore asked the audience of 650 to 700 people to consider what that means when residents file their taxes every year.

“We have to have tax reform in this nation. It’s essential,” Pridemore said. “Whether it’s the Fair Tax, the Flat Tax or the Simple Tax, I believe that they’re all fine alternatives to the tax system that we have now. For me, I prefer the Simple Tax.”

Col. Larry Mrozinski , U.S. Army retired, a Woodstock resident, said the Fair Tax does have support and challenged the question.

“Ladies and gentlemen, the Fair Tax is fair,” Mrozinski said.

Mrozinski said it was “capitulation” for any candidate who wouldn’t work to repeal the 16th Amendment and eliminate the IRS.

“We’re looking at another capitulation before we get to the office,” he said. “Congressman Mrozinski will advocate the repeal of the 16th Amendment and right now until something comes along better, the Fair Tax is the one to push.”

Transition plan needed, Loudermilk says

Former state Sen. Barry Loudermilk (R-Cassville) said the first move to make is eliminating the IRS. There are challenges with each tax proposal, Loudermilk said. While the Flat Tax is the simplest to transition to, with just a 10 percent across-the-board flat tax, he said the argument becomes, are certain deductions still available?

“Can we deduct charitable contributions, or what about your mortgage interest rates, can we still deduct those?’ Loudermilk said.

The biggest argument with the Flat Tax is it still leaves in place the 16th Amendment, which Loudermilk says taxes people achieving the American dream.

“The Fair Tax is complex, it has so many moving parts, and it has the prebate that’s involved with it, but the problem that we have with the Fair Tax is there’s no transition plan,” Loudermilk said.

Loudermilk describes the prebate part of the Fair Tax as government subsidizing the utility payments for the poor.

As a small business owner, Loudermilk said he can’t do a major change over in his business without some kind of transition plan.

Like Pridemore,Loudermilk is also a fan of the Simple Tax, calling it “a brilliant idea.”

State Rep. Ed Lindsey (R-Buckhead) asked conservatives in the room to raise their hand.

“That’s what I thought,” Lindsey said, seeing all the hands.

“So let’s go ahead and do the poll right now. How many of y’all believe that we as conservatives should abandon the Fair Tax, raise your hand.”

Few hands were spotted.

“That’s about what I thought,” Lindsey said. “The fact of the matter is there are independent groups and there are independent groups. And I’ve learned this over a decade in public service: a lot of independent groups are funded by one organization or another that has a vested interest in the outcome of the study, and the fact of the matter is the studies that were quoted by Professor Swint, the folks that were funding it had a vested interest in maintaining the status quo.”

Lindsey wants corporate tax rate cut

Lindsey said the Fair Tax is the best possible alternative in the long run. He also called for the repeal of the 16th Amendment.

Lowering the corporate tax rate is also needed.

“We literally have trillions of dollars sitting offshore right now because the corporations are not prepared to bring back to the United States at our present very high tax rates,” Lindsey said. “You want an incentive plan, in which we don’t have to borrow money? Bring that money back underneath the restructured corporate tax plan. In addition to that, we need to bring every one’s tax rates down to spur growth. Then we need to start looking at the Flat Tax and then finally … we don’t go to the Fair Tax until we repeal the constitutional amendment dealing with the IRS.”

Allan Levene of Kennesaw, a native of Britain and naturalized citizen, was next to take the question. Levene is also running for congressional seats in Michigan, Hawaii and until recently, Minnesota. Levene said he dropped out of the Minnesota race because of a lack of interest from the Minnesota GOP and public.

“The problem we have as I’ve said before is our government has gone insane, and they do not want to change the tax code,” Levene said. “The reason is they like to control the public. I’m a big believer in liberty. I’m a big believer in this flag and what it represents. The key is to reduce taxes and increase our GDP. If we do not increase our GDP we are in such serious trouble.”

Levene said corporate taxes shouldn’t just be lowered, but eliminated. By striking down corporate taxes, trillions of dollars of foreign corporations will bring their businesses here, he said.

“Very simply, they don’t want a tax on their profits, which means they have to invest that money,” he said. “If foreign corporations come here, they will build factories and new facilities providing an enormous increase in domestic employment, and I foresee if we do eliminate the federal corporate taxes, ladies and gentlemen, we will have more jobs than people to fill them, incomes will go up and the chronic unemployment problem that we have will go away completely.”

Status quo most powerful force in universe, Barr says

Were President Ronald Reagan in the audience, former U.S. Rep. Bob Barr of Smyrna said he would give the same answer to Swint’s question as Barr.

“Not only no, but heck no,” Barr said. “We should never, ever, ever, give up on what is right and trying to do what is right for America. Now we all know that the IRS is bad. It is bad evil. And we also know that the most powerful force in the universe is the force of the status quo. It is difficult to move a seemingly immoveable object. It is difficult to get rid of the income tax … but if we lie down and simply say, ‘Oh, the opponents of the Fair Tax have beat us down and it’s no longer viable,’ then they win. I refuse to let the liberals win. I refuse to let the status quo win. We must continue as we did back in the 1990s to continue to press forward from the grass roots on up. It’s not going to come from the top down it comes from we the people to keep the pressure on Washington, to keep the pressure on the bureaucrats, and we will get there.”

Comments
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Stephen C. Eldridge
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April 08, 2014
The “Fair Tax” is a Fraud – we need a 10% “Tithe” Tax!

I am a retired lifetime tax consulting professional (JD, LLM in Taxation, CPA, co-author of a 3 volume tax treatise, lecturer), with no financial stake in ANY tax system. This only a brief summary - for supporting details of all comments, call Stephen C. Eldridge tel. 423-532-7337.

The so-called “Fair Tax” (“FT”) is a fraud – it is MORE WEALTH REDISTRIBUTION, AND a financial SCAM.



In their own words, FT proudly advertises that it is MORE PROGRESSIVE (yes, it is MORE WELFARE).

Of prime importance, the Prebate is NOT a real refund of FT paid as it appears to be. It is a new $600B ENTITLEMENT, which would have ALL Americans receiving a substantial monthly check from the federal govt – a very bad idea for those of us who are not Socialists. We simply cannot afford yet another huge entitlement that will only be increased in the future.

The FT and the Prebate would leave the working poor making no contribution at all to funding the federal budget and paying nothing even for their personal SS/Medi benefits. The FT and the Prebate then extend tax welfare to the non-working poor –and also take the next Progressive Cloward-Piven step towards giving SS/Medi to all regardless of work, by removing the tax “penalty” for reporting SS Wages, thereby “inviting” the fraudulent reporting of SS Wages.

The Prebate is apparently calculated to merely repay the poor for any FT they pay, but actually would pay them far MORE than any FT they might pay (by “assuming” the poor spend MORE than the underlying HHS Poverty Guidelines and also by “assuming” they will pay FT on ALL of their purchases, but they WON’T) - and FT also provides free SS/Medi to the working (and some non-working) poor.

The FT produces a 40-70% in-your-face retail sales tax that would spark a taxpayer rebellion that would destroy our retail-sales-sensitive economy. 40% = 30% (not 23%) FT e.g., 10% S/L sales tax and 70% is the rate needed at a sample 30% FT evasion rate (the FT incredibly assumes ZERO evasion and ZERO intentional reduction in spending and ZERO migration from new to used goods).

IN ADDITION to that 40-70% tax, the FT contains several HIDDEN TAXES. 1) FT’s 30% rate is really 42 %; the 12 % is hidden by having fed S/L govts paying FT – ultimately, they must get that money from you. 2) The initial 30% rate is 1-5% short and that plus any other revenue shortfall will have to be made up by raising more FT (or a NEW Income Tax), 3) The fed budget will rise for a) higher SS benefits and higher COLA’s payable to all federal retirees, both induced by FT’s price increase of nearly 30%, and for b) fraudulent new SS benefits invited by FT’s removal of the “tax penalty” for reporting SS Wages, – more FT (or a NEW Income Tax) we be required to fund these.

The NEW IRS (i.e., the STAA) may well be far worse, far more invasive than today’s IRS (the buyer is liable to pay FT and get/show a receipt – The STAA may audit consumers) – also we may well have to file an “Annual FT Summary”.

We may well wind up with BOTH a NEW Income Tax AND the FT, when Congress repeals the FT’s Sunset Clause and enact a NEW Income Tax .

Seniors will start to pay for SS/Medi again and some will pay a 2nd-3rd tax on their earnings. Many middle class seniors will pay more FT than they would have paid in Income Tax and many will lose purchasing power because of 1) the nearly 30% price increases and 2) the higher S/L & federal taxes required because they must pay FT and can only get the funds from us, and 3) higher federal taxes due to higher SS & pension COLA’s and fraudulent SS benefits.

The FT promises grand economic benefits which are all UNPREDICTABLE - mere Hype & Change.

What we need is a Flat Income Tax with No Deductions, No Exemptions, No Credits and a 10% rate, with business income taxed to shareholders on a very simple basis (i.e., no corporate income tax) - See H.R. 1040 (which has been included in Paul Ryan’s new budget), but with changes as noted here (IRS is neutered, 1 page tax filing, everyone pays - more evolutionary). Call your representatives in Congress and let them know that this is what you want.

Just Wait
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April 08, 2014
Of course the Republicans support the "fair tax" because it will benefit the wealthy. And you can be sure if it were to ever pass, there would be loop holes you can drive your Rolls Royce through.
COBB CSI
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April 08, 2014
Barr is right go to a national sales tax than even the porch riding Democrats will have some skin in the game. The Fed’s would have live on a certain amount of money and have a balanced budget. Shouldn’t all of us be allowed to keep all overtime money tax free since we support the free riders? Surprised the Democrats haven’t declared that all workers can only work 36 hours a week. Shouldn’t all of us supporting the non-producers get three day weekends. Sounds like the Democrats have a war on workers!!
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