Congressman Steve King (IA) Talks to FairTaxNation , Part I

FairTaxNation Has a Conversation with Iowa's FairTax Cosponsoring Representative Steve King. 3/06/09 7;30 AM FairTaxNation: Rep King, We are very pleased that you have been as outspoken as you have been concerning FairTax. There's been a lot of grumbling among FairTax supporters who have been pushing this a long time. This is partly due to the fact that we don't see a lot of leaders standing up and saying "You know, FairTax would work a whole lot better than a stimulus that we basically have being pushed on us through a very liberal minded agenda. They are using this tax code to tell us how to run our lives. The FairTax is such a great way to bring money flowing back into the country. I would like to get your thoughts on that as one of the points I want you to cover with me.. Representative King: OK, again some of this will be what you heard last night of course.{on CSPAN}. I'm happy to talk about it. I just think that the most important thing to know about the FairTax is this point: And I go back to this consistently, and that is that Ronald Reagan once said and I agree, I think that it is ir-refutable that what you tax you get less of. If you put 100% tax on anything then you would end up with no production and whereever your 100% tax is, if the government were to consficate all of your wages, no one is going to show up to work the next day. And so, where is the perfect tax? It is somewhere between 0 and 100 % and the question is, "How are you going to collect it?". So, there is two components. There is the production side and there's the consumption side. What the FairTax does is it takes all of the tax off of all the production that the federal government taxes in America. And there is not any question that we would get a lot more production. Production, I define as earnings, savings, and investment. So we tax the tax off of all our earnings, savings and investment and we end up with a lot more earnings, savings, and investment because we are punishing that now by taxing it the minute it apears. And I mean
the minute, so that changes the dynamic and unleashes American workers and it tells people; "Why not work those extra overtime hours because you will have more money in your pocket without taking anything out of your paycheck". It also says to someone who has a small manufacturing plant, or a large one, "Go ahead and hire on some more employees because you will not be punished for that. You will be able to take the income of that and reinvest it without penalty. When the dynamics change and puts it over on consumption, that then lets the individual pay taxes when they choose. Not only that but it gives them an insentive for saving as well. This nation is low on savings, as we know. That is one big piece. The other big piece is one that no one ever talks about, and I wish they would, is that you can take any one of our polititions and philosophers who has talked about what happens when over half the people figure out that they can vote themselves funds from the public treasury. Generally, you will hear that our constitutional republic will cease to exist. And I believe that! I think that the number is over 50% today and President Obama is racing us in that direction where over half the people will not have a federal income tax liability. They will pay taxes but they will not know it. They will be paying embedded taxes in the things they buy and there will be taxes on their payroll in payroll, Social Security, and medicade but they will not realize that. So, when they will try to vote themselves benefits from the public treasury the government grows. President Obama can take that message to the American people and they can buy it hook, line, and sinker. So this [is an] important point that seems to be lost on most advocates of the FairTax is that
the FairTax makes a tax payer out of everybody. And we will be reminded everytime we make a transaction and we pay that federal income tax of how expensive or federal government is. So when you think about how this works, in the end, decisions are made here in Washington DC and in our state capitals around the country by people who are reflections of the culture. That is why people like Antonio Gramsci and Sol Alinski decided they were going to be community organizers, tear down our civilization and our culture, take away our values, and then they can take over the country in the fashion that they are doing now. I want to raise generations of conservatives and this is an example {candy store}... {SNIP] FairTaxNation: ...We have this trillion dollars that we have our government willing to take from our children to fix our {economy] now in comparison to allowing the FairTax that would allow the 13 trillion dollars to come back in from over seas, Why would anyone want to invest in our country with [the highest or second highest corporate tax rate in the world]? You were a contractor, a construction contactor, so you understand corporate tax rates and so on like this. Can you expound on what will happen if we totally remove the coporate tax rate by implementing the FairTax...[snip] ... instead of having the government creating jobs so that people can work for the government.? Representative King: There are two components to this question. One of them is capitol gains tax and the other is corporate income tax. There is, as reported as of last September, maybe the value of these assets may have diminished some but as of last September, there are about 13 trillion dollars in US capitol that has been stranded overseas and its faced with a 34 % or 35 %, much of it tax penalty on either capital gains or corporate income tax as is other assets in the United States. That 13 trillion dollars could come back into this economy and I don't think it would be 13 trillion becouse some of it is invested pretty deep and their commitments but it migrated out in that direction and it would migrate back here. I think it could be one to three trillion dollars that would [flow back] almost immediately into the US economy if we stop punishing our corporations and punishing the capitol gains. I would remind the readers and the listeners here that corporations do not pay taxes. Business do not pay taxes. It is people who pay taxes. Business and corporations have to take the cost of taxes into the price of the products that they are selling and get that from the end user. So, what they are is an agragator of funds. It is easier to ask them to pay the tax than it is to have the individuals pay the tax. From an administrative stand point, they are tax collectors for the federal government and for the state governments but they are not taxpayers. That tax is transferred onto the consumers. FairTaxNation; The other thing that you mentioned last night that caught my attention was, what did you call it? Quasi-sovereign... you called it quasi-sovereign contracting or what was it? What was that you were talking about? Representative King: Ok what I was talking about [lost audio] well, I can't go collect on a debt. [from those under contractual agreement because they are also the arbitrator.]
To be continued.