Statement from Rep. Steve King on FairTax Special Order

Americans For Fair Taxation ^ | March 17, 2009 | Steve King

[Man50D]

On Tuesday night, March 17th, Iowa Congressman Steve King is going to host a "Special Order" on the floor of the House of Representatives on the FairTax! For one full hour Members of Congress will discuss the FairTax and how our legislation can save the US economy.

Our current economic crisis will not be solved through tax increases or massive government spending. In these tough times, we need an innovative solution on Capitol Hill: the FairTax.

The FairTax is the best and most effective way to encourage business growth and positive, long-term economic performance. Enacting the FairTax would usher in a new period of American economic growth, create new jobs across the country and give American citizens more control over their own paychecks.

On Tuesday, March 17, several of my House colleagues and I will spend an hour on the House floor discussing the merits of the FairTax and sharing its positive message with C-SPAN viewers (Watch live Tuesday night via your local cable provider or at http://www.cspan.org. Scheduled start is 6:00 p.m. EST, but may be delayed due to normal House business).

Our goal is to educate and inform more Americans about the FairTax and how it can help American workers and businesses. Millions of Americans have either never heard of the FairTax or do not know enough about it, but as more people hear about the FairTax, support grows.

My hope is that this hour and similar opportunities in the future will add to the groundswell of national FairTax support. I spent 28 years running my own construction business, and I remember thinking that if I was ever in a position to help dismantle the IRS, I would do everything I could to make that happen.

Right now we need the FairTax not only because our federal tax system is broken beyond repair, but because it will help unemployed Americans find new jobs and help families pay their bills. Now is the time to position the FairTax in the center of the ongoing economic debate in Congress, the White House and throughout America.

[Man50D]

Fair Tax ping!

[Logical me]

The FairTax will not work unless all Federal Taxes are revoked. That is ALL! No liquor tax, no tobacco tax, no telephone tax, no gasoline tax, etc. Otherwise we still will be paying double, triple, and more in taxes and defeats the FairTax as still no fairer than what we have now.

[BuddhaBrown]

“...the FairTax as still no fairer than what we have now.”

I agree.

The asinine concept of “prebates” in the so-called FairTax completely invalidates it for any thinking conservative.

[Windflier]

The FairTax will not work unless all Federal Taxes are revoked.

Go to the Fair Tax website and read up on the whole proposal. Revoking the entire IRS code and all existing federal taxes is one of the central parts of the Fair Tax.

[BuddhaBrown]

“Go to the Fair Tax website and read up on the whole proposal.”

I’ve read through it a couple times and there definitely are some good ideas in there even if they seem politically impossible to implement.

I know Man50D’s opinion on this, but I thought I’d ask you:

Do you not see the addition of the socialistic “prebates” as a poison pill for conservative acceptance of the whole so-called Fair Tax concept?

[navyguy]

The prebates, as distasteful as they are, were explicitly put into the FT to make it sell. They aren’t a requirement, but they do help sell the plan. I don’t like it either, but the number of good things about the FT completely outweigh the prebate question.

[BuddhaBrown]

“...the number of good things about the FT completely outweigh the prebate question.”

I disagree completely and will not support the FairTax with the crazy prebate idea.

[shannon1776]

You think the prebate is a pipe dream? Do you know what it is? It is the equivalent of the handouts you get once a year now. You know them by the name of the Form 1040. The feds have done a masterful job of creating handouts in the tax deductions. Did you also know that currently the Treasury hands out $800 billion a year through tax returns? Through the prebate, it will be about $500 billion. So, come to think of it,the income tax annual “prebate” is a bigger handout—even for any “thinking conservative” like yourself. Actually, you are just ignorant. And you are conservative?

[shannon1776]

Socialist prebates? Wow, considering the prebate is just a monthly “tax deduction” instead of the once a year tax return you have to fill out. One more thing you guys need to understand is the prebates amount to about $500 billion a year-$300 billion LESS than the tax rebates we get now under the income tax. So, who is socialist now??????

[Windflier]

Do you not see the addition of the socialistic “prebates” as a poison pill for conservative acceptance of the whole so-called Fair Tax concept?

Yes I do. However, the Fair Tax is still a far superior method of funding our government, than the progressive income tax is.

The so-called "prebates" are something I also found distasteful in my first reading of the Fair Tax (years ago), but I understand the reasoning for them.

The Fair Tax isn't a conservative utopian tax plan, but it does put taxation in the right place, and that is on consumption - not income.

It's "fair" in that it taxes everything across the boards (and for everyone) at the same rate. In that way, it's a bit like a flat tax, except that it doesn't penalize production and industriousness. Even a flat income tax would still do that.

It may not be the most perfect tax plan devisable by the mind of man, but it's a far cry better than the legalized extortion now being practiced by our government.

But the thing I like best about the Fair Tax, and the one thing that liberals and leftists hate most about it, is that it takes away one of the left's chief tools of Socialist income redistribution.

That's also why it will be one of the hardest things to get through our Congress.

[BuddhaBrown]

"Actually, you are just ignorant."

The only thing I'm ignorant of in this debate is what the heck you meant when you suggested that I view prebates as a "pipe dream".

That term describes something desirable but not likely attainable. In other words, you've used a term that describes the exact opposite of how I feel about prebates.

I consider prebates as extremely detestable though not all that unlikely to occur (assuming the good aspects of the FairTax ever attain serious congressional consideration.)

"...prebates amount to about $500 billion a year-$300 billion LESS than the tax rebates we get now under the income tax."

Now we're getting closer to the real definition of a pipe dream. If you actually believe those numbers are both firm and somehow protected from yearly congressional manipulations, then you must be smoking something (I believe opium was the preferred contents of the pipe when the term was coined.)

"So, who is socialist now???"

Clever spin even if a bit juvenile.

You will NOT find anywhere that I've defended the current progressive (socialistic) income tax system or its politically charged system of credits and deductions. Nice try though.

I will gladly go into more detail late tomorrow night, when I'm less busy, if you wish. But here is the relatively short version of why I detest the silly prebate concept:

I like the conservative oriented aspects of the FairTax - no IRS, switch to consumption tax, etc. If you so-called FairTaxers would stick to that kind of stuff then I'd be on your side. A flat sales tax rate and no other federal taxes would be great by me - a system that actually is fair by logical and objective definition.

But then comes the politically motivated prebates. So tax "fairness" will become, as it is today, a subjective and again quite politically charged definition which is guaranteed to change with the political winds.

I know that the reason otherwise conservative folks might support the corruption of a real fair (flat) tax rate by implementing socialistic progressivity via prebates is because they feel it is an evil which is politically necessary to acquire liberal and moderate supporters. But that is at the expense of many true conservative voters such as myself.

Yes, I'd love to see the IRS go away so the feds don't need to know how much I earn.

Yes, I'd love to switch to the more savings-friendly consumption tax.

Yes, I'd love to see the complicated and varied tax systems simplified.

But spending is the real problem in Washington. Those bastards won't quit spending like drunken sailors until there is serious public pressure to do so. And prebates are specifically designed to lessen the burden of federal taxation to the point where, like today, millions of voters will pay no net federal tax. These voters will NOT feel compelled to pressure the big spenders.

In fact, they will likely vote for politicians who promise to raise the dollar amount that appears on the monthly prebate checks which the FairTax would send to everybody. And, yes, as mentioned in the FairTax propaganda it will be possible to have a negative tax burden - making the pebate just another welfare check for some.

The prebates introduce a second tax bracket - the zero rate bracket as opposed to the 23% bracket (or whatever congress decides). In theory, you'd pay no net tax up to some subjective spending level (based on an ever changing political definition of poverty and necessities) that is supposed to insulate less productive folks from over burdensome taxation.

In reality, the effective annual tax rate will vary from a negative amount (welfare) to something just shy of the top rate (23% or whatever).

Progessive rates sound "fair" to progressives I suspect. But, as I said, that is a subjective definition. A true flat sales tax rate would be fair by logical objective definition.

And insulating large numbers of voters from the burden of federal taxation might sound compassionate (hell, Republicans do it too via earned income tax credits and such). But I don't subscribe to that liberal definition of compassion. And I do want ALL voters to be negatively affected by and positively angry about federal spending when they go to the ballot box.

[Iowa Granny]

Kingster Ping

[BuddhaBrown]

"...the Fair Tax is still a far superior method of funding..."

My prior comments confirm that I agree the so-called FairTax is a better funding mechanism than what we've got today.

"It's "fair" in that it taxes everything across the boards (and for everyone) at the same rate."

Not true. It is an effective progressive rate (just like today) as I described earlier only because of the prebates.

"...it takes away one of the left's chief tools of Socialist income redistribution."

Also not true. I know what you are saying about income taxes, liberal class warfare and such. But prebates re-introduce socialistic tendencies into the tax code and in a way that might seem acceptable to some short sighted conservatives. From day one some folks will profit from prebates, some will break even and some will pay anywhere from a penny to almost 23% (or whatever the top rate actually becomes) of the amount they spend as EFFECTIVE rates once the prebates are factored.

It is, in effect, a more purely progressive rate than the current system.

In the long run there is nothing in the FairTax that can prevent future congresses from raising the dollar amount of the prebates to the point where a majority of voters are paying no net federal tax. That is no way to curtail runaway spending - a more serious problem than the unfair funding mechanisms.

Why not keep it actually fair by eliminating the prebates and lowering the one rate?

"...it will be one of the hardest things to get through our Congress."

Agreed.

[Jimmy Valentine's brother]

I’ve read the plan. I’m happy that Congressman King is taking positive action to do away with the current tax code. If passed, we wouldn’t have to worry about Rats trying to beat the system illegally or screwing up their TurboTax prepared returns.

[Windflier]

Why not keep it actually fair by eliminating the prebates and lowering the one rate?

That is something I think all conservative supporters of the Fair Tax should advocate for. As I said earlier, I also find the "prebate" element to be counter to the common sense of the basic plan.

I also have to agree with you that the prebate element is something of a trojan horse. Socialists could indeed expand that in future permutations of the consumption tax to continue engaging in class warfare and vote buying.

Conservatively speaking, it would be far better, and "fairer", to simply tax every commodity and expense at the same rate, across the boards. That would close the door on any possibility of meddling with a "gimme" for the entitlement class.

That's where you wind up (again) with having to sell the plan to a wide spectrum of people, some of whom will deduce that taxing a poor person and a rich person the same amount on a gallon of milk impacts the poor person unequally (for a commodity basic to human life). Even lowering the basic rate won't kill that argument.

In the long run, it just might be better to sort out a class of goods and personal expenses that would be exempt from any federal taxation.

But don't ask me to do it. I don't need the migraine .. LOL

[BuddhaBrown]

“...the prebate element is something of a trojan horse.”

My point exactly. Many FairTaxers seem to think I’m supporting the current system or bashing the FairTax as a whole. No so. I just don’t want to poison a good idea with the seed of socialism that is called prebates.

In a spiritual analogy, the prebates are what God refers to as leavening which, though seemingly a small matter, will eventually corrupt the whole.

Forget the prebates. If politics demand that we continue to encourage poverty, then send only the poor a voucher/card/sandwich or whatever scheme allows liberal to feel good. That way those folks will have to demonstrate need (income and other invasive info) whereas the rest of us will not. It will be one more discouragement for welfare.

[Jacquerie]

I disagree completely and will not support the FairTax with the crazy prebate idea.

Yeah the perfect is always the best enemy of the good. You therefore prefer the 60,000+ pages of incomprehensible income tax regs.

[BuddhaBrown]

“...the perfect is always the best enemy of the good.”

I hope you’re crediting Obama for that mangled quote.

“You therefore prefer the 60,000+ pages of incomprehensible income tax regs.”

Nonsense!

Now you’re using an Obama-type straw man. Did you even read my posts?

[Jacquerie]

Did you read one the Fair Tax books? Most retired old farts that dominate FR can’t be bothered.