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Source link: http://archive.mises.org/4428/there-is-no-such-thing-as-a-fair-tax/

There is No Such Thing as a Fair Tax

December 11, 2005 by

Writes Laurence Vance: Syndicated talk show host Neal Boortz and Congressman John Linder (R-GA) have joined forces to write a book on the FairTax Plan—a proposal to replace the current system of federal income taxes, corporate taxes, Social Security and Medicare taxes, capital gains taxes, gift taxes, and estate taxes with a national sales tax on new goods and services that does not reduce the government’s overall tax revenue. They have never been so right and never been so wrong. [FULL ARTICLE]

{ 486 comments }

Yancey Ward January 9, 2006 at 9:04 am

Paul,

I have some trouble with your restatement. To what purpose would it be that resources migrate to the higher order production if the lower order production declines? Now if exports of the higher order production from the country with the sales tax increase, then it might make some sense.

Fred Wilkins January 9, 2006 at 9:57 am

Sasha, one other thing; when I said “Please don’t come back with the same old false argument that the tax will go into affect as soon as the FairTax is put into place; ” I didn’t say it was false that the sales tax would go into affect immediately; what I said was, it is a false argument; meaning it was a false argument to us to justify your theory.

Paul Edwards January 9, 2006 at 10:12 am

Thanks for the feedback Yancey,

To simplify i ignore foreign trade because i don’t believe it modifies the analysis.

The main premise of my argument is that the resources have to leave the retail stage because that is where the new general tax is incident, and no retailer can avoid it; and no retailer can immediately pass this new cost onto his customers. Therefore, the marginal retailers, without question will be forced to leave that stage of production.

Keeping in mind that the incidence of the new general tax is for the moment, exclusively on the retailers, the next question is, where do these retailers go? Where would i go? I’ll assume they aren’t ok with to just lie idle and starve. If i could only loose money in retail, but steel workers were making good money still, (because the retail tax didn’t apply directly to steel) and i could, i would now go work there, or go do something to support the steel industry, or maybe copper, lumber, or software. I’d get out of retail.

That’s two points, do you agree so far? The factors don’t say “i can’t make money in retail so i’m going idle”, they say “i can’t make money in retail so i’m going where it seems i can make money”.

Thirdly, after some time, albeit probably not months and definitely not years but probably weeks, all of the other longer term consequences i mention obtain. supply of retail goods diminishes so retail prices increase; supply of factors for higher order stages of production increase so the prices of these factors decline; supply of higher order products increase and also the demand for higher order products decrease both pushing the prices of these goods down.

Overall, the cost of this new general sales tax is distributed across the incomes of all factors of production, from mining to the retailer, including partially to the consumer in terms of higher retail prices.

Yancey Ward January 9, 2006 at 10:59 am

Paul,

I hadn’t read your reply to Sasha before I wrote my comment. I think I understand what you meant a little better than before. I thought you meant that the actual production of higher order goods would rise on an absolute basis.

I think you and Sasha did not discuss the mostly option: I think the the actual tax would be more likely to be evaded illegally rather than the vendors completely shutting down, or moving to higher order production. I would expect the large retailers to lose business and fragment as more people became illegal vendors to survive. The government would find it impossible to collect the same amount of revenue.

Vince Daliessio January 9, 2006 at 11:39 am

Fred said to Sasha;

“I guess you forgot to factor in the amount the income tax and withholding for SS and Medicare that will go directly into people’s pockets rather than going directly to Uncle Sam.”

Aside from the fact that putting these programs into the general fund will conceal the drastic increases that will be necessary to continue them in the coming years (very clever Boortz), you make a bad situation worse by declaring that somehow the money currently going to these bankrupt programs will no longer do so, but instead go back into the pockets of working people.

Whatever your opinion of the relative effects of the “Fair Tax”, the aspect that should worry us the most is the increased insulation and dissociation of Social Security and Medicare from any kind of accountability by divorcing them from the paycheck. This alone is enough to turn me away from the proposal even before considering the likely effects (black markets, rate-ratcheting, and reimposition of income taxes on top of the sales tax).

Paul Edwards January 9, 2006 at 11:40 am

Yancey,

My intent was to follow through the sequence of events in the event that, or to the extent that the black market was unable to avoid the economic consequences of the tax.

If the black market becomes so extensive that absolutely no sales tax effectively is collected, then naturally my analysis is null and void. But then i suppose that applies to Rothbard’s analysis as well, since his analysis also assumes the tax is collected.

Fred Wilkins January 9, 2006 at 12:13 pm

Vince writes “you make a bad situation worse by declaring that somehow the money currently going to these bankrupt programs (S.S. and Medicare) will no longer do so, but instead go back into the pockets of working people.”

This is the kind of ridiculous statement Sasha would make. Are you sure you are not one in the same person? It won’t go back into the pockets of working people because it never left. It leaves their pockets when they pay for goods or services.

By the way, the reason Social Security and Medicare are going bankrupt is the way they are being funded. (Income tax)

Sasha Radeta January 9, 2006 at 1:34 pm

I’m sorry, but I’ll not waste too much time on this clown. I’ll repeat it, until he stops blabbing, or responds with relevant arguments. Anyone can check data from IRS or Tax Policy Center http://taxpolicycenter.org/home/ and see how much Americans pay in income taxes. “Prebate” (23% of monthly poverty line spending) and income tax abolishment will not raise income tax by the amount necessary to sustain the “FairTax”. Laws of economics dictate that this increase must be significantly higher than 30% in order to account for price increase above current market level, as well as people’s saving preferences. But even before any of this paycheck increase occurs, there would be a drop in aggregate demand, due to implementation of 23% revenue confiscation from each complying seller. This would not only extract large amounts from private spending and investment, but it would also shift tax burden towards final goods sellers (even those who don’t make enough income to survive), and from there this drop in demand would translate to a stagnation in all stages of production (including labor input).

Fred Wilkins January 9, 2006 at 2:42 pm

I should have expected it; more nonsense babbling by Sasha

mikey January 9, 2006 at 3:11 pm

Paul, If I understand your post, Fair Tax would result in a tremendous transfer of wealth from the unlucky to the lucky ones.This is true of most
changes to how taxes are collected, the price of an asset “factors in” the way it is taxed(or subsidised.)BTW, do you think payroll taxes can cause unemployment? I don’t think they do.

Vince Daliessio January 9, 2006 at 3:36 pm

Fred says, tellingly;

“By the way, the reason Social Security and Medicare are going bankrupt is the way they are being funded. (Income tax)”

Complete nonsense. They are going bankrupt because they are socialist conceptions completely unamenable to economic calculation, that in any event were never intended to work as advertized, and have further systematically and simultaneously had their coverages greatly expanded (through congressional fiat and demography)and their fundings embezzled both explicitly and through inflation.

And, if they are underfunded now, when specific tax dollars are supposed to be required to be directed into them, what will happen when that linkage is severed?

My remark was intended to illustrate that the way your statement was worded, you appeared to be implying that working people would no longer be paying for these programs. Here’s what you said;

“I guess you forgot to factor in the amount the income tax and withholding for SS and Medicare that will go directly into people’s pockets rather than going directly to Uncle Sam.”

It looks like you were trying to imply that wage earners would no longer be paying for these old-age welfare programs. Try to refute that.

As far as Sasha and I being the same person, that’s ridiculous. I don’t have 1/100th of the patience that man has with your silly, question-begging and assumption-based arguments.

Vince Daliessio January 9, 2006 at 3:42 pm

Mikey;

“BTW, do you think payroll taxes can cause unemployment? I don’t think they do.”

I’m a little surprised that you even ask such a question here, as it is a little obvious, but I will take a crack at it.

If I am able to sell widgets at a profit, and the government adds a tax onto my payroll of 30% per employee, my aggregate labor cost has increased by 30%. If I cannot remain profitable while raising the price of my widgets to cover the 30% increase, then I will either lay off 30% of my workforce, or go out of business.

Vince Daliessio January 9, 2006 at 3:42 pm

Mikey;

“BTW, do you think payroll taxes can cause unemployment? I don’t think they do.”

I’m a little surprised that you even ask such a question here, as it is a little obvious, but I will take a crack at it.

If I am able to sell widgets at a profit, and the government adds a tax onto my payroll of 30% per employee, my aggregate labor cost has increased by 30%. If I cannot remain profitable while raising the price of my widgets to cover the 30% increase, then I will either lay off 30% of my workforce, or go out of business and lay off 100% of them.

Yancey Ward January 9, 2006 at 3:52 pm

No one has yet addressed the fact that the Fair Tax will amount to a 23% tax on present savings. This is a transfer of wealth from savers to non-savers. Anyone?

Fred Wilkins January 9, 2006 at 4:22 pm

Vince, Yes, I did say withholding for SS and Medicare will go directly into people’s pockets rather than going directly to Uncle Sam.

This is true. With the FairTax it goes directly from employers hands to employees hands. With Income tax it goes directly from your employers hands to Uncle Sam’s.

With the FairTax it doesn’t leave peoples’ hands until they purchase goods or services.

Fred Wilkins January 9, 2006 at 4:29 pm

Vince writes: “And, if they are under funded now, when specific tax dollars are supposed to be required to be directed into them, what will happen when that linkage is severed?”

Again, I say the reason they are under funded is the system in which they are funded. Yes that link will be severed as it should be. It will be funded through the FairTax which will be a much more reliable means of funding.

Fred Wilkins January 9, 2006 at 4:34 pm

Vince, Sasha? writes As far as Sasha and I being the same person, that’s ridiculous. I don’t have 1/100th of the patience that man has with your silly, question-begging and assumption-based arguments.

Gee Vince how did you know sasha was a man. Sasha is usually a woman’s name.

Fred Wilkins January 9, 2006 at 4:41 pm

Good Job Vince, Sasha. Only Sasha has been known to double post.

Fred Wilkins January 9, 2006 at 4:48 pm

Vince Sasha writes “If I am able to sell widgets at a profit, and the government adds a tax onto my payroll of 30% per employee, my aggregate labor cost has increased by 30%. If I cannot remain profitable while raising the price of my widgets to cover the 30% increase, then I will either lay off 30% of my workforce, or go out of business and lay off 100% of them.”

Now I know he, she has gone looney . I think you are reversing the role of the taxing methods here.

Sasha Radeta January 9, 2006 at 5:06 pm

Fred is a deeply disturbed individual who does not want to realize that I’m ignoring him and his refuted idiocies. He now even hallucinates that I’m Vince. His posts now have nothing to do with economics and he started obsessing about my identity.

PS
Outside of your Ghetto, where females are named Shaquonda, Anaconda, Fanta, Misha, Kasha… – Sasha is actually Slavonic male name, etymologically derived from Alexander (like Bill is from William, Dick from Richard).

PPS
Is there some kind of moderation on this blog, to sweep-off Fred’s garbage? Jeffrey?

Fred Wilkins January 9, 2006 at 6:22 pm

Yancey writes “No one has yet addressed the fact that the Fair Tax will amount to a 23% tax on present savings. This is a transfer of wealth from savers to non-savers.”

If the FairTax were to go into affect, you are correct. Savings prior to the FairTax is with after tax dollars, which is a crime in itself. If Vince Sasha is reading this I want to make it clear what I just said. I didn’t say the FairTax was a crime, I said it is a crime that our current savings is with after tax dollars. If you spend those dollars on anything other than education, they will be taxed again. I could care less about my savings, it’s the future savings that my children will accumulate that concerns me more. With the FairTax, their savings will be with before tax dollars, if they allow their interest to accumulate; their savings will grow at a much faster rate than with our current tax system.

Here goes the mathematician again. Let’s assume you have a $50,000 annual income and you save 10% of your net earnings each year for 10 years. Let’s further assume, you allowed the interest to compound. Let’s see what your balance would be under each method of taxation. This is going to be a tough one for Sasha Vince to follow, but here goes. I will compound the interest yearly rather than daily so they might be able to follow along.

Let’s first look at what you would have at the end of 10 years with our income tax system. Let’s use an average case scenario of someone in the 15% tax bracket. After withholdings for income taxes, S.S. and Medicare, they could save $3867.50 of their $5000. Remember saving with our income tax system is with after tax dollars. One year’s interest would be $193.37. Next year you deposit another $3867.50 into your account and by the end of the second year it has accumulated to $8327.74. If you want to check my figures for the remaining 8 years you will find out at the end of 10 years you will have accumulated $51,077.16. But remember, if the savings wasn’t in either a tax deferred account such as an annuity or a tax free bond account, you will pay income taxes on the interest even though it was left to accumulate.

Now let’s look at the accumulation after 10 years with the FairTax. Since it is before tax savings you are able to deposit the full $5000 each year. At the end of year one, you will have $5250; at the end of two years you will have $10762.50 and at the end of 10 years you will have accumulated $66,033.93. Yes, if you go and spend the whole accumulation on a new car and 23% will go to Uncle Sam. Oh I forgot according to Sasha Vince it wouldn’t be 23 of your savings; it would be 30% of the car dealerships revenue.

Paul Edwards January 9, 2006 at 6:34 pm

Hi Mikey,

Any tax at all is a transfer of wealth from a productive person to a parasite. I could only advocate a reduction in parasitic taxing and spending; the precise form of it seems of small consequence to me. (I hope that doesn’t offend anyone here).

A payroll tax or any other tax results in an increase in consumption; parasites always only consume; they never invest. Therefore, it strikes me taxation always tends to diminish economic progress by diminishing capital investment and productivity and so move us in the direction of poverty and starvation. Whether we keep ourselves busily employed during that process isn’t as interesting to me as avoiding the theft and the waste of wealth and prosperity that we labor for in the first place.

The point of my posts here is just to analyze how the economy actually adjusts to an introduction of a new general sales tax. When I first read Rothbard’s discussion of it, i was fascinated and enthralled to find that a detailed analysis of a general sales tax did not render an intuitive conclusion: i.e. a sales tax is simply a tax on factor income. I always love that sort of thing.

But what i also later found pretty exciting was to find that i think i have improved on Rothbard’s analysis. That sounds kind of arrogant, but that is why i put it out here in case someone either thinks 1. I haven’t added anything to what he said, or 2. i’m just wrong, 3. We’re both wrong or 4. Eureka! I’ve provided a new and additional insight.

Fred Wilkins January 9, 2006 at 9:56 pm

Wow I wonder how Sasha Cohen our US female figure skater, who is the reigning World Silver Medallist, ended up with a Slavonic male name.

I wonder how Vince knew Sasha was a Slavonic male name?

Just having fun with you Sasha.

Sasha Radeta January 10, 2006 at 1:24 am

You tell him you’ll ignore him and idiot will only get an incentive to continue calling you out… Of course, he has no idea who Sasha Pushkin is… Or at least DJ Sasha…

Well who cares. You are still hallucinating that I’m Vince and that your numbers actually mean something, even when law of supply and demand – as well as income tax statistics deny everything you say. Your statements are outside of the science of economics and well within psychopathology. Get help, ok?

Fred Wilkins January 10, 2006 at 3:27 am

Sorry Yancy, it would help if you knew what interest rate I was using in my comparison. You probably already figured that it was 5%. I state the rate for Sasha Vince. But then again he could care less what the actual figures are when comparing the two tax system. He likes to keep using the same old hog wash that 23% revenue confiscation would apply from the first day of the “FairTax” implementation, while there would only be a modest increase in demand due to so-called “prebate” that only amounts to 23% of poverty-line cost of living.

Sasha Radeta January 10, 2006 at 9:58 am

Yancy,

Once he understands what that means, he’ll understand how this tax is revenue neutral, extracting the same amound from private spending, without any “grace period” for tax-payers (they just shift the tax load towards the final good sellers).

mikey January 10, 2006 at 1:59 pm

Vince,Paul, thanks for commenting on my dumb question.Vince, I don’t see payroll taxes as a sales tax on labor, increasing the costs to the employer. Rather, they are a burden born entirely
by the sellers of labor.The fact that the taxes
are collected and remitted to the gov. on behalf of the workers, by the firm, is what misleads some people.But there is no difference to the economy
if workers were responsible for paying.
If Say’s Law is valid for labor,an income tax on wage earners should not cause unemployment.

Vince Daliessio January 10, 2006 at 2:18 pm

Fred says;

“Vince, Yes, I did say withholding for SS and Medicare will go directly into people’s pockets rather than going directly to Uncle Sam.

This is true. With the FairTax it goes directly from employers hands to employees hands. With Income tax it goes directly from your employers hands to Uncle Sam’s. ”

And Mikey says;

“I don’t see payroll taxes as a sales tax on labor, increasing the costs to the employer. Rather, they are a burden born entirely
by the sellers of labor.The fact that the taxes
are collected and remitted to the gov. on behalf of the workers, by the firm, is what misleads some people.But there is no difference to the economy
if workers were responsible for paying.
If Say’s Law is valid for labor,an income tax on wage earners should not cause unemployment.”

How do we reconcile the two statements?

Vince Daliessio January 10, 2006 at 2:26 pm

A thought – if Say’s Law applies to the cost of labor, defined as the total marginal cost per unit of the particular production factor we call a manhour, then yes, Say’s Law applies AND explains how increased payroll taxes can increase unemployment.

From the economic perspective of the employer it matters not one whit whether the dollars he expends to purchase manhours of labor go to his employees or to the government – but most entrepreneurs I know would rather leave the money on a bus than remit it to Uncle Sam, philosophically speaking.

Steve Keller January 10, 2006 at 5:45 pm

I am sure most of you are familiar with the Kiplinger letter. At one time I read where Mr. Knight Kiplinger, editor in chief of the Kiplinger letter, was totally against the Fair Tax. Now see what he has to say about it. Go to http://www.kiplinger.com/personalfinance/magazine/archives/2006/01/kak.html

Larry March 17, 2006 at 1:57 am

Here is one more problem with the “Fair Tax” that Mr. Vance missed: it allows the government to break its promises about non-taxable retirement accounts. Remember the “Roth IRA,” in which you paid an income tax on the contribution so that “none of the proceeds would ever again be taxed?” Well, the federal government realizes that it is looking at a serious income shortfall as the baby boomers reach retirement age and no longer have taxable income. What better way to continue to fuel the leviathan than to switch to a consumption tax, allowing them to get a brand new bite at the retirees’ wealth that they already bit once?

the count June 2, 2006 at 9:29 am

1) The Fair Tax does NOT eliminate the income tax. Section 905 still imposes an income tax and requires employers to withhold that income tax. Sure, it’s “only” levied against foreigners who have US income, but it is still an income tax. Indeed, it makes repeal of the 16th amendment incompatible with the Fair Tax.

2) It does not necessarily put all americans on the dole, it remains quite optional. In order to receive the rebate you must first register with the government. And then the government must deem you to be a “qualified family”. Which strikes me as just another angle from which the politicians will attack gay marriage, at the very least.

Paul September 18, 2007 at 3:09 pm

Thank you for the article. I am new to the Mises website, but I have already read several books like The Case for Gold, Assessing the Presidency, and Speaking of Libery. I found this article and also your article The Flat Tax Folly very informative. Both ideas seem to be smokescreens of improvement while continuing to enable the Congress to spend unchecked. I have a idea that I have not seen mentioned much and would be pleased if anyone would read and comment on it. Here is the link. Thank you in advance.
http://remnant-republic.blogspot.com/

george foley January 28, 2009 at 3:16 pm

Way too much misinformation to cover, but two points. If you calculate the minimum federal income tax and social security (24%) as the author does his sales tax calculation it is 31.5%. The tax you pay divided by what you have left. Using the same method the fair tax is 30%. If you can’t follow that you don’t belong in this debate. Second, with the fair tax using the tax code for social engineering is eliminated. That would bring the tax system back in line with the constitution.

Hutch March 10, 2009 at 6:20 pm

George Foley has many good points.

Someone WAY at the top of the blog says that the Fair Tax is a less visible tax than the current system. Please look into what an embedded tax is, and realize that since the Fair Tax is collected at purchase… it’s on your receipt. If you can hold onto a receipt, then you can see how much tax you pay with the Fair Tax.

Vance saying that the Fair Tax should be thrown out on the second line because the Fair Tax isn’t about saving us tax dollars is absurd. First, he must have missed the part in the book about the Trillions (with a T) of dollars that will pour into our economy with the implementation of the Fair Tax. Second, I guarantee you that if Vance wanted to throw out the Fair Tax just because it didn’t save us tax dollars; he never got past a page of Nietzsche.

Dugan King December 17, 2010 at 6:40 pm

The Fair Tax Plan
Years ago (on July 11th, 1993 to be exact) the Arkansas Democrat-Gazette published an original proposal to reform our broken tax system. It appeared under a provocative headline;

“It’s time to scrap the IRS and create an equitable tax system”

The non-partisan article (written by yours truly) explained how income and property taxes were illogical, unfair and prone to chaos and corruption. My revolutionary thesis proposed replacing invasive taxes with a simple excise or national sales tax.
In retrospect, anytime we grant government the power to tax income or property, individual freedom becomes a temporary illusion. Such intrusive taxes should not exist in a country that professes “liberty and justice for all.” With these tools in place, the State can slowly tax its way to absolute power. Once deprived of civil rights, our children and grandchildren might one day find themselves shackled under a new mode of serfdom and subject to the tyrannical whims of an elite oligarchy.
Can any government be trusted with direct taxing power? History says absolutely not! That is why our Founding Fathers, in their profound wisdom, drafted a Constitution that originally prohibited non-uniform, capitation (or head) taxes.

Karl Marx and the Income Tax
The graduated income tax was first promoted by Karl Marx in his Communist Manifesto of 1848. For those unfamiliar with political history, Marx was opposed to freedom and democracy. According to his Communist creed, the Sate would become supreme and citizens would become dependent upon the State for all their needs. Under Marx’s peculiar vision, traditional concepts such as private property and economic freedom were considered obstacles to the creation of a supreme State. For Communism to succeed such basic rights would have to come to an end.
In pursuance of his objective, Marx introduced the idea of the graduated income tax as a major plank in his manifesto. Like a choker chain, an income tax would enable the State to thoroughly manage and control it’s subjects while robbing them of the fruit of their labor.
He also proposed a central banking monopoly as another major plank for establishing Communist power.
Karl Marx was clearly a man without a soul. His Communist caste system has been tried and failed. His propositions are diametrically opposed to the American way of life. That is why a lot of brave Americans have spilled blood and died to stop the specter of communism, yet it continues to linger somehow, like a ghost in the attic.
It was during the administration of Woodrow Wilson, who was surrounded by Marxist advisors such as Edward Mandel House, that two of the major planks of the Communist Manifesto were railroaded into law. The Federal Reserve Act created a central banking monopoly and the 16th Amendment authorized an income tax. This diabolical combination has drastically altered the meaning and spirit of our U.S. Constitution. The moment these planks became law is when “We the People” began to lose control over our destiny.
Today, after millions of bankruptcies, home foreclosures, bank takeovers and corporate crashes, all due to a spendthrift government, Marx’s socialist vision seems to be creeping into reality. But it is not too late to reverse the direction. We still have a chance to preserve our American legacy by demanding reform of our national tax code.

“Vigilance is the price of liberty!”
We owe it to our children and grandchildren to take immediate action. In order to preserve liberty and save the economy we must first establish a single tax that will satisfy all the elements of thrift, efficiency, simplicity, uniformity and fairness. The only way to do that is to replace Marx’s income tax with a national sales or excise tax.
A sales tax is the only tax that is fair and uniform because everyone pays the same percentage. With a national sales tax you can determine how much tax you pay by the way you spend your money. If you decide to save or invest your money, you would pay no tax at all. And in spite of the false claims of Marxism, a sales tax is not regressive but progressive because wealthier citizens who spend the most will be taxed the most. To make it even more progressive, luxuries and vices could be taxed at a higher rate than basic necessities such as food and medicine…which could be tax free. And sales taxes are easiest to compute and collect. So all the positive elements mentioned before are therefore satisfied. You simply can’t do that with an income tax or a property tax. It’s mathematically impossible.

Economic Results
The elimination of the income tax would create the biggest stimulus in U.S. history. It would supercharge the purchasing power of millions of workers. Imagine taking home your gross paycheck free of deductions. Such a big raise would quickly translate into a greater demand for products and greater savings. Multiply that times every worker in America and the economy would go… BOOM!
By eliminating payroll taxes, millions of American businesses would be free from non-productive paperwork and unnecessary accounting costs. The elimination of payroll taxes would lower the price of American products at home and overseas and enable us to better compete in foreign markets. The resulting drop in prices will most likely absorb and neutralize the initial impact of a national sales tax.
Abolishing Marx’s income tax would also enable our government to excuse thousands of IRS bureaucrats, engaged in non-productive arithmetic. Their Gestapo days of terrorizing hard working Americans would come to an end. And due to the increased business activity sparked by abolishing income taxes, the government would actually reap more revenue from the sales tax. The combination of less bureaucracy and more revenue should enable them to balance the federal budget and pay down the national debt.
Replacing the income tax with a sales tax right now would send positive shockwaves across the marketplaces of America. It would make life much easier for everyone including our government. It’s a win/win proposition.
After my article appeared, numerous phone calls came in from readers supporting my thesis. One kind gentleman sent a letter to the editor to nominate me for U.S. President. I must admit, it was good for my spirit and ego. There were also suggestions to organize a political action committee, but I had no free time to become politically active again. My intent was to introduce the idea in the hope that someone with political muscle might read it and take it to heart.

Birth of the Fair Tax Movement
Today it appears the idea has caught on in a big way. In 1995 a group of Houston businessmen, led by Leo E. Linbeck, Jr., spent millions of dollars to conduct academic research on the subject. Their positive findings compelled them to launch the Fair Tax movement.
I was unaware of this until I started following Mike Huckabee’s campaign for President. Apparently the Fair Tax movement made great progress in Iowa during the Presidential primary. Huckabee learned about the Fair Tax movement while campaigning in Iowa and he immediately adopted the plan. In his recent book, “Do The Right Thing,” he attributes his success in Iowa to his position on the Fair Tax Plan and gives it some of the credit for his amazing second place finish behind John McCain.
And now a bill to enact the Fair Tax into law is pending before Congress. It is gradually attracting co-sponsors from both sides of the aisle. And Missouri, the “Show Me State,” has become the first test case. They recently replaced their state income tax with the Fair Tax.
I’m very excited by all this. Could it be possible that my letter to the editor, published here in Little Rock, was the tiny spark that ignited the Fair Tax movement? I certainly like to think so. One should never underestimate the power of the pen. It can sometimes alter the course of history.
http://www.FairTax.org

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