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Replace All Federal Taxes on Income with the Fair Tax Act , HR 25

Rob Woodall Declared the Winner in Runoff - Likely to become the Next FairTax Sponsor

Rob Woodall, Chief of Staff to retiring Congressman and FairTax sponsor, John Linder, GA-07, has just been declared the winner of his Republican primary runoff election, in Georgia's Seventh Congressional District. Woodall soundly defeated his second-place rival from the earlier Republican primary, Jody Hice.

FairTax Regional Director, Phil Hinson, says that the winner of the Republican primary is likely to become the next Congressman in this heavily Republican district.

This development is good news for FairTax-ers. Woodall was a co-author of "FairTax - The Truth," and he campaigned heavily on the FairTax. Woodall has the best grasp of the FairTax of anyone in Washington and will do a superb job carrying the flag about to be handed him by John Linder.

We welcome Rob Woodall as the new head of the growing club of FairTax co-sponsors.

~Jim Bennett

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Go Rob! I had an interesting email exchange with his D opponent, Doug Heckman, who lied about the FT (as you would expect). The G2 I got from it is that opponents to the FT have no legitimate objections, only lies. I found it quite telling - and told him so. I told him that lies will no longer work because so many people are educated on the FT now. He said there is little support in Congress for the FT. I responded that that was proof positive that the FT was good for the people. Remember that Congress has an 11% approval rating ;-). And there was much more.... I suggest you all hammer him with messages that warn him to not lie about the FT and obstruction to the FT is tantamount to treason.

http://dougheckman.com/

Steve
I also told Heckman that his stupidity is showing. He wants to take the corporate tax rate in the US from 3 times Ireland to just twice. Is that not the very definition of stupid?

# It cuts the top corporate tax rate from about 35% to 24% – this will make our businesses much more competitive in the global marketplace.

Ireland is 12%..... where would you locate your business?

Steve
Woodall's victory in GA DC #7 is very important for the FairTax. Here's why. All of the Republican contenders (there were about six, I think) supported the FairTax and all tried to convince voters that they would be the most effective advocates for it in congress. Woodall clearly knows the FairTax better than others and he only made one campaign promise: that he would have more co-sponsors on the bill than ever before in the history of the proposal. Woodall defeated a better financed opponent, Clay Cox, among others. Cox was considered by experts to be the strongest contender in the field and a heavy favorite to win. Cox was perceived to be lukewarm on the FairTax (at least compared to Woodall) and nowhere near as knowledgeable. That isn't a slam against Cox; probably no one in congress (including Linder) understands the economics of the FairTax as well as Woodall. Having Linder's endorsement for his seat certainly didn't hurt Woodall's cause, either.

Because of Linder's relentless advocacy of the FairTax for the past decade, as well as the proximity to Neal Boortz's broadcasting center, the 7th congressional district of Georgia has an electorate with a greater understanding of the FairTax and a stronger support level, than almost any other congressional district in the country. Those two, by the way, go hand in hand: the more you know about the FairTax, the stronger you become in supporting it.

Conventional political wisdom has become that support for the FairTax is a political liability. Part of the playbook of the DCCC has become running ads against FairTax supporting Republicans each election cycle and telling partial truths in sound bites that are difficult to rebut in soundbite manner. We have had some congress members and candidates shy away from the issue for fear of having those ads run against them. Unfortunately, the perception among political consultants is that those ads are effective. If they weren't, the Democrats would not be spending millions running them. What Woodall's victory shows, however, is that in areas where the electorate is very familiar with the FairTax, it is absolutely a political requirement for congressional aspirants. It is highly unlikely that the Dems will be running those ads in north Atlanta and if they do, they will elicit a huge backlash, just as they did when run against Georgia senator Saxby Chambliss during a recent election cycle. Regardless of where voters stand on an issue, they dislike being manipulated and misled for partisan political purposes. The voters of north Atlanta understand the FairTax very well and they recognize the ads for what they are - disengenuous to the extreme.

Unfortunately, most US voters are not as familiar with the FairTax as those in north Atlanta. That is why it is incumbent on us as volunteer advocates to continue to educate all Americans and why it is critical for congressional candidates to explain to their voters why the FairTax is such a critical issue. If ever this nation needed the economic boost and the enormous job creation that the FairTax would bring, that time is now.
What this means is "the best defense is a strong offense". The candidate that supports the Fair Tax must promote the Fair Tax and how it effects each issue.

*Education; The Fair Tax does not apply to the costs of education. it will automatically lower these costs for books, tutions etc
*Economy and jobs: Fair Tax does not apply to business. This lowers the costs for manufacturing, services, distribution and other industries. Businesses will flock back to USA and create new jobs.
*Raising wages: As businesses move into the area, they will want to hire the best workers. They will pay a higher wage to their workers. The former employer will have to pay a better wage in order to keep their workers.
*Untax the low income: The prebate will eliminate all federal taxes up to the poverty level for all legal residents in the Country. Anyone at or below poverty level will not pay any federal tax, individuals at twice the poverty level will only pay any taxes on half of their spending.
*Illegal Immigration: Since everyone pays the Fair Tax, undocumented people will be paying the Fair Tax but will not be able to file for the prebate. They will desire to "get legal" so they can obtain the prebate.

These candidates have to promote this and ask the Dems "why do you not support the Fair Tax?" The more exposure to this "REPLACEMENT TAX" to the income tax the harder it will be for the DNCC and UNION PAC's from running their ads!
EDUCATION AND TRAINING.—The term ‘education and training’ means tuition for primary, secondary, or post secondary level education, and job related training courses. Such term does not include room, board, sports activities, recreational activities, hobbies, games, arts or crafts or cultural activities.

It does not exclude the books for the education and training courses. The above exemptions are for other activities than the education expenses.
The specific items you mention are business expenses of the school system. There is no Fair Tax on businesses. Fair Tax applies it items at the retail (consumer) level. Since income tax is eliminated, all the "salaries" for workers are not taxed and therefore the operations of the school would be lower. Therefore the actual cost of operations for schools is less. The schools can therefore lower the tuition rates.

Education is not "goods or services" but rather an investment in the person. It is therefore not an exemption. Health care and mortgages are "services". The purchase of a home is an investment, but the act of borrowing money from someone else is a service. Health care is using the service of others I hope this gives you some understanding why you cannot find it elsewhere.
Hank, (this is out of place as there was no "reply to this" after your post.)

The non-governmental school that receives tuition for educating students are not required to collect FT on their revenues. A government school system is using the taxes collected to cover the costs. This revenue is the "tuition" for their operation. Effectively, they would be considered a "government enterprise" under Section 704.

As long as the school bus is used for the business use, no FT would be collected. If any business has equipment that is used until it is scrapped, there would be no FT collected on the item. It never reached the "retail level".

There are a lot of details that are not in the actual bill, but will have to be filled in. It happens in all bills. Just look at the health care bill!
Hank,
From our previous exchanges, I know you are familiar with the Kotlikoff Tuerck Beacon Hill piece on the needed rate to replace Subtitle A, B and C taxes, and you are also aware of Footnote 20 on page 671. You left that out. According to that footnote, $403 Billion of 2006 dollars are excluded from the FairTax tax base for wages and salaries for public education. Yet the replacement rate is still 23.81% tax-inclusive.

I asked Paul Bachman of the Beacon Hill Institute whether the $403 Billion figure included all salaries for the school district, and he confirmed last week after looking back through his 2006 notes that it did. I.e., the superintendent, the janitor, the lady in the lunch room and the bus driver are included.

If your argument is that making state and local governments pay taxes on their salaries will make state and local taxes skyrocket, the exclusion of education salaries cuts into your argument substantially. I can tell you that in New Jersey, where my local property tax bill has surpassed the $12,000 mark (and my house is below the median for Summit, which means half the houses in my town pay more), the School District is close to 60% of that bill, and salaries are the biggest component. If school district salaries are excluded, that would make a substantial difference to me.

If Kotlikoff's, Tuerck's and Bachman's interpretation of the bill is wrong, and they excluded too much from the base, that means only that $403 Billion are added to the FairTax base, and the FairTax rate can be reduced.

This point, by the way, was covered in a reply last week to your rebuttal to my article in the Gloucester County Times. I refer you back to that exchange. Meanwhile the FairTax should be re-introduced as is.

~Jim
Hank,

This is just my thought but here goes.

The school board does provide the education which is the investment and is not taxable under the FT. The school bus is used to transport students for the process of obtaining the education. Therefore there would be no FT to be paid. (B2B transactions).

The lunches is a different operation. Students can bring their own meals, outside vendors could be used to provide meals or the school board could set up a business to sell lunches at retail for students. They would be responsible to collect the FT on the price of the meal. This would be the same as if an outside company leased space on the property or was set up cross the street from the location and students would be allowed to visit these restaurants during school hours. (Some schools do this now.)

There is the additional question about the "free lunch program". The school board would be responsible for the FT on the value of these meals.
Hank,
I think a lot of public school districts will rush to form government-owned non-profit corporations to be sure they don't pay tax on buses and school lunches. What's to stop them from doing that? I think they should.

They may not need to, as chiefcook says. Anyway, that step would keep the local property taxes down.
~Jim
A very thoughtful discussion overall, along with some very thoughtful replies. But getting back to the original idea of the Dems attack ads - I'll bet you that I can come up with a 15second sound bite response that completely destroys any attack ad - if you're willing to call a lie a lie.

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