Domestic Taxes

Tea Party primary wins give boost to ‘fair tax’ plan to kill federal income taxes

Primary victories by Tea Party candidates have given a boost to the

so-called fair tax, a reform proposal that abolishes incomes taxes —

and the IRS — and levies a tax on spending instead.

The levy received little attention during the 2005 tax reform debate

under President George W. Bush because experts warned it raised less

revenue than the current system and would force drastic cuts in the

size of the federal government.

{mosads}While that prospect does not sit well with many Washington insiders,

it dovetails well with the Tea Party’s mantra: fewer taxes, less

government.

“Both the Tea Party and the fair tax seek to put power back in the

hands of the American people,” Rep. John Linder (R-Ga.), the primary

sponsor of fair tax legislation, said in a statement to The Hill.

Linder predicts that the Tea Party’s growing ranks will force

lawmakers to take a serious look at his fair tax bill.

“I believe that as support for the Tea Party movement continues to

grow, Americans will learn about the benefits of the Fair Tax,” Linder

said. “As more Americans begin to understand how the Fair Tax can turn

our current economic situation around they will voice their support

for this fundamental tax reform plan to their representatives, and

Congress will have no choice but to act.”

Todd Cefaratti, executive director for JoinTheTeaParty.us, said that

roughly 1,000 new recruits join the movement every day. And while the

Tea Party is a splintered collection of groups without a unifying

leader, Cefaratti’s organization connects them by providing them with

daily updates about the movement.

Republicans have taken note of Tea Party upstarts toppling Sens. Lisa

Murkowski (R-Alaska) and Bob Bennett (R-Utah), and blocking Rep. Mike

Castle (R-Del.) from running for a Senate seat he was widely expected to win. Some

conservatives who aren’t even up for reelection this year are tacking

farther to the right to keep the Tea Party from supporting a candidate

in their home state.

The Tea Party’s entrance onto the political stage comes as

congressional tax-writers begin shouldering the enormous task of

reforming the tax code. Senate Finance Chairman Max Baucus (D-Mont.)

has announced a hearing on the subject this week, the first in over a

year.

“We’ve got to reform our corporate and our individual income tax for a

whole host of reasons,” he told reporters recently. “It’s going to be

difficult. It’s going to take time. I’m going to do what I can to make

it thoughtful, and that means extended hearings on [the] various

aspects of individual and corporate tax code.”

The fair tax essentially replaces income and payroll taxes with a

national sales tax that would likely be collected at the state level.

Many experts say state agencies don’t have the manpower or technology

to monitor all sales, which will lead to greater noncompliance in

terms of taxpayers paying their fair share.

But a recent poll by the Tea Party Patriots gave the fair fax

extremely high ratings, beating out other tax reform proposals, like

the flat tax, as well as other non-tax issues Tea Parties consider

extremely important.


“Out of all the issues that online respondents listed – including a

balanced budget amendment, term limits, drill-here-drill-now and whole

host of other issues – the fair tax came out No. 1,” Philip Hinson,

national spokesman for FairTax.org, told The Hill.

None of the high profile Tea Party candidates like Sharron Angle, Joe Miller or Christine O’Donnell mention the fair tax on their campaign websites, but Cefaratti suggests the proposal does fit within their profile.

“[The] tea party movement doesn’t have just one or a few positions as we are a grassroots movement and not a single organization with a single leader,” he told The Hill. “The movement is about core principles of following the US constitution as the founders intended of limited government, states’ rights, individual liberty and freedom.”

The fair tax plays well in the South with all but one House Republican challenger from Georgia supporting the proposal, Hinson says. Republican challenger Bill Marcy in Mississippi’s 2nd district and Rep. John Boozman (R-Ark.) running for the Senate also support it.

Linder’s latest Fair Tax bill has 64 co-sponsors, including Rep. Dan Boren (D-Okla.). The total is a record high.

“We’ve heard that there are more congressional candidates running in

support of the fair tax this year than has ever been the case,” Hinson

said, adding, “When you go to any Tea Party rallies, particularly here

in the South, you see fair tax signs and fair tax T-shirts

everywhere.”

Tags John Boozman Max Baucus
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