Fair Tax Nation

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

I had the following email discussion with Curry Kenworthy yesterday and with his permission I am reposting it.




I am glad to see that you are running against Cleaver and I hope that effort is successful.


Your issue positions are great. Having you in the House would make a difference. I appreciate you contacting me here on ResistNet, which I joined but hadn't had time to use much. Here are a few friendly ideas to consider from a supportive constituent!


1. I notice that you are a big supporter of Fair Tax. Anything (almost) is better than the current system, but the Fair Tax doesn't do it for me. It's a good idea turned in the wrong direction; despite some other advantages, there are big flaws. Those prebates will require lots of bureaucracy, and the tax rate is still pretty high!


For American people to regain freedom and prosperity, government must learn to live within its means just as we do. I think a flat sales tax of 10% for everyone, rich or poor, should be sufficient for federal government. The American people must be firm and stop them from demanding more than 10%. No prebates; if we want to avoid taxing poverty spending, simply allow stores to charge no tax for bread, milk, eggs, and veggies at the checkout.


2. We also need to cut the number of people on the dole. I have a handicap (CMT, a nerve disease that weakens muscles) but I am working hard to make money from home so that I can avoid going on disability if possible. (That's after a long and difficult struggle over the past years where I had to cut down more and more working outside the home, but I've never applied for disability yet.) In America we have a huge number of people that can work part-time but not full-time, and a lot of people with handicaps fall into that category. But under the old all-or-nothing benefits system, working part-time is pretty hopeless. Many people are either on disability or working part-time and leaning on the government for health care or etc. If we could encourage a per-hour benefits system at work rather than all-or-nothing, or just raise wages and cut out benefits, letting each employee decide on healthcare (and ditch ObamaCare of course) we could have more people working and fewer depending on government.


3. The deficit will kill this nation. Long term, we need law preventing Congress from spending more than it can repay within a reasonable time, say three years, but how to pay off the current debt is a mind-boggling puzzle, so perhaps for now we need a complete ban on any further debt spending until the current debt has been paid off and we've been in the black for a while. Goodness knows when that would be, but at least not raising the debt would be a step in the right direction!


Some food for thought--good luck in your campaign! Sounds like you have plenty of good ideas too.


Curry Kenworthy


In an additional note:


Then there's state and local tax. How do you feel about property taxes, by the way? Do you really own something if you have to keep paying to retain it?"


This my response to Curry.



You are correct that I am a big supporter of the FairTax. The other candidates in this race appear to be generally favorable to the FairTax, but I am the only candidate that can truly be called a FairTax advocate (or FairTaxer for short).


Let's address your perception of the bureaucracy associated with the prebate. To be eligible for the prebate, a qualified family (defined as "1 or more family members sharing a common residence") must submit an annual registration that requires each individual family member be a lawful resident of the U.S. and have a bona fide Social Security number. With the FairTax, this form is much simpler than the Federal Income Tax forms which will be eliiminated. FairTax will eliminate 80% of all tax returns (and all individual filing returns).


The prebate amount is based upon the poverty level (as determined by the Department of Health and Human Services) for the size of the family and multipled by FairTax rate to refund the tax paid on basic necessities. The Social Security Administration bears the responsibility to make the monthly prebate payments on or before the first business day of the month for which the prebate is being provided. This can in the form of a check, smartcards that carry a cash balance, or by direct electronic deposits.


While there may be some additional staffing required in the Social Security Administration, this would be more than offset by eliminating the Internal Revenue Service resulting in a net reduction in the size (and cost) of our Federal government.


Initially the tax rate is high but it is designed be "revenue-neutral", in other words to bring in the same amount of revenue as the current system. It is important to note that the FairTax is only paid on the purchases of new products and not on used items, therefore there is no FairTax on used automobiles or clothing purchased at a second-hand store.


After the first year, the tax rate is the calculated on 3 factors one of which is the gerneral revenue rate of 14.91%. As we reduce the size of government and pay down the national debt, this rate could amended downward.


I understand your recommendation on a 10% flat tax but initially we need to keep the tax revenue to the federal government consistent with current levels. Avoiding taxation on food items is understandable, but clothing is also a necessity even at the poverty level. If clothing is included then a determination at the point of sale is needed to verify eligibility of the purchaser for non-payment of the tax. That would increase administration costs, is subject to fraud, and may increase the costs on those businesses who sell clothing. FairTax does avoids the potential for fraud and compliance costs.


I agree with you regarding the need to reduce the number of people on government welfare. House Minority Lead John Boehner has proposed some unemployment reforms (which I have included in my Issues In-Depth for Unemployment) that should help in this area. In the healthcare arena, moving away from an employer provided benefits program to an individual based program eliminates the distinction between part-time and full-time employment. The insurance pool could be based on a geographical area as opposed to the number of full-time employees at an individual company.


Lastly regarding the deficit, I couldn't agree with you more heartily. If you will review the Issues In-Depth for Budget Reform on my campaign website, if there was a budget deficit the previous year(revenue minus expenditures is a negative balance) then the budget is frozen and cannot be increased over the previous year. When there are budget surpluses they are used to pay down the federal debt and when the federal debt is retired to reduce the tax rate.


Both FairTax and budget reform measures are required to pay off the federal debt and stop the annual deficit spending that is occurring.


Regarding state and local taxes, the FairTax passed the State House in Missouri but expired in the State Senate due to a threat of a filibuster from the Democratic Senate Minority leader this year.


I am in favor of fiscal responsibility at all levels of government and am opposed to property taxes. As you correctly point out, you don't really own something if it can be taken for non-payment of property taxes."

Jerry Fowler for U.S. House of Representatives (MO-5)

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