Bookman to discuss FairTax

Martha Zoller is doing something that Neal Boortz won’t do, and that is discussing the FairTax with Jay Bookman:

On several occasions, FairTax champion Neal Boortz has used his syndicated radio show to attack me for daring to point out the absurdities of his pet proposal. For some reason, though, the blustering Boortz has repeatedly refused to let me debate the issue on air with him. Maybe he fears what might happen should his faithful listeners be allowed to hear a dissenting viewpoint.

But hey, it’s his show, and his choice.

Martha Zollar, another talk-radio champion of the FairTax, is made of sterner stuff. She’s invited me to talk about the proposal on her show Thursday morning. Beginning around 9:30, we’ll bat the FairTax around and then take calls and questions from listeners. Her show is on WDUN News/Talk 550, and can be heard on the station’s website.

Boortz has said he would debate the FairTax with Bookman, but has never responded to any attempts to do so. One example was on April 23, 2007, when Boortz wrote:

Hey … here’s an idea! I’m up for a fight right now. How about a public debate somewhere? Jay Bookman and me! Look, I’ve debated Yale tax law professors and former deputy assistant Treasury secretaries on the FairTax, I think I might be able to stand up pretty well against a deputy editorial page editor who finds it necessary to lie about an idea before he can criticize it.

Date and time? We’ll work it out!

A few days later, he followed up with this:

[T]his morning I’ve instructed Belinda to contact Emory University, Georgia State and Georgia Tech to see if just such a debate forum exists, and if they would like to have little old me and hotshot columnist Jay Bookman come debate the FairTax! After all … why wait for Bookman to set it up! He’s more interested in attacking me than in getting to the truth of the FairTax.
[…]
Come on, Mr. Bookman. Chose your audience … and let’s rumble.

But … in the meantime … you FairTax supporters leave Mr. Bookman alone. He clearly doesn’t like to be challenged.

I don’t agree with Bookman on economics very often. He is, after all, a big government liberal, but at least he has been willing to debate the issue and put his money where his mouth is and Martha Zoller deserves credit for doing what Boortz isn’t willing to do.

31 comments

  1. Icarus says:

    + 2 points for occasional Peach Punditer Martha Zoeller.

    (though she still has yet to weigh in on the son-of-thread-of-dreams)

  2. StevePerkins says:

    The day that Neal Boortz finally goes off the air, the FairTax is done.

    Well I mean, of course it’s been “done” from day one in the sense of having no prayer of passage. I’m talking about “done” in the sense of Georgia politicians no longer having to pretend to endorse this nonsense in order to avoid problems with the grassroots. Once local politicians no longer have to worry about Neil using his radio show to attack them, they could finally drop all this silly crap and move on.

  3. CobbGOPer says:

    And you people are why we’re never going to get any effective tax reform in this country.

  4. IndyInjun says:

    No, Cobb, the reason that tax reform will never come is because we had congressmen like John Linder who voted to swell the obligations of the US Government from $35 trillion to $62 trillion during the Bush 43 administration. This amounts to $800,000 for a family of four, with same family of four earning less than $70,000 and that is inclusive of taxes.

    There is no tax known to man that can collect enough revenue to dig us out.

    Your “logic” escapes me, for Russia and several East European countries have successfully implemented a FLAT TAX that produces a cornucopia of tax revenue, but you FairTaxers reject this system outright, in favor a demonstrably unworkable system.

    So who REALLY is being an obstacle to workable tax reform?

    Farris has it right….the FairTax movement is a cult.

    Perkins is right about Boortz and the fear of his show’s reach.

    The delicious irony is that his FairTax is a greater threat to Boortz’ radio diatribes than the Fairness Doctrine he rails against. He would be the first in line for an exemption.

    Instead of reading “the Book” I suggest that he and Linder read THE BILL. It is H.R. 25.

  5. IndyInjun says:

    JK,

    Eventually we will have to concede to a national sales tax.

    After the US government declares bankruptcy, along with state and local governments, the huge component of the 30 cents- on-the-dollar FT rate can be lowered to maybe 12 cents.

    Social security will be gone. The military will be slashed and brought home. Ultimately Linder will have “succeeded” in bringing down big government, not by “starving the Beast” , but by gorging it until it chokes!

    Then a NRST will work, but it won’t resemble the Fair???tax.

  6. John Konop says:

    Indy

    As you know I agree! But I do think a small flat income tax with no write offs would level off the revenue and keep the transaction cost lower.

    Also it eliminates all the constitutional issues. .

  7. Zod says:

    Income taxes are absurd and unnecessary. If you refuse to pay, you get arrested. If you resist arrest, you get killed. That’s not liberty and justice for all, it’s tyranny.

    Taxing business and production is dishonest to consumers since we ultimately pay all taxes.

    The Fairtax is simple, honest and completely workable. We only pay one tax. Everyone pays the same tax and nobody gets arrested or killed for choosing to avoid paying the tax buy saving money or buying used goods. If that’s not liberty and justice for all, I don’t know what is.

  8. Jason Pye says:

    Bruce Bartlett believes will have either a NRST or a VAT in addition to the income tax to address funding problems with entitlements.

  9. IndyInjun says:

    Yes, Bartlett has been so writing for several years, now.

    Either tax will confront the same reality as the current European VAT and the GREAT plan ran into – consumption taxes must include business consumption to sufficiently broaden the base, so that rates don’t get into the absurd stratosphere as Fair???tax.

    Bartlett and this PPunditeer have corresponded over the years on FairTax. He attacks it from a mostly different POV, choosing to take on the economics. The FairTax.org chooses mostly to defend it with prostituted experts on the same basis. The economic point-counterpoint leaves most folks glassy-eyed, although Bartlett wins, as did Professor Graetz when he debated Boortz.

    I prefer to approach it from the practical effects that it has on state and local governments, business, and people based upon THE BILL and the largely-invisible existing system of sales/USE taxation.

    Probably the most convincing argument against the FT was when the most vocal and committed pushers of the FairTax in the Georgia House of Representatives immediately found it NECESSARY to completely reject its principles when they crafted GREAT.

    A more interesting topic for PP might be to visit each of the GREAT proponents to find out if they understand that they found FT unworkable, and if so, why they continue to endorse it.

  10. MSBassSinger says:

    I wonder if those who “doth protest too much” on the FT are really against it because it strips politicians, bureaucrats, and their sacred cows of too much power.

    The economics of the FT make sense when one looks at the facts, not the propaganda and hyperoble. I don’t get a chance to listen to Boortz much, so I can’t comment on what he says on-air. But – and this may be hard for policy wonks to comprehend – I used my own knowledge, read for myself both pro and con, and spent time digging into every aspect of the FT, including what I could find on income tax history. It just makes sense.

    The person who said that business needs to also be taxed missed the point. All retail sales (i.e. not-for-resale) would be taxed – regardless of the entity (private, corporate, governmental, ornamental, vegetable, mineral, animal, etc.) doing the purchasing. That is one tap into the flow of money as opposed to the legion of taxing points currently sucking us dry.

    As to why the FT is not a good idea for state taxes, it is because the state has way too many boundaries with other states and no practical regulation of crossing state lines to buy goods and services. If Georgia implements a state FT, every border county will lose sales to the state next door. That problem is not applicable to the nation. A FT, for example, would work fine in Alaska, Hawaii, Guam, Puerto Rico, or other states & territories not having to deal with border issues. Note that Florida has no state income tax, since there is not enough population in the border counties to significantly affect sales tax revenues.

    Somehow our country propsered without a federal income tax. The US Supreme Court even found it unConstitutional such that an amendment had to be created and added to the Constitution before federal income taxes could be levied. It seems to me that anyone who has an originalist view of the Constitution would readily recognize the immorality of an income tax the same as our Founders did.

    The FT cannot take effect until the 16th amendment is repealed. That is by design and in the legislation. Keeping both an income tax and having a VAT (as some have proposed) would put us into the same cess pool many European countries are in.

    I am all for a flat tax now – some reasonable percentage with no exemptions – while the 16th amendment is being repealed. A flat tax is a good interim step. But, understanding that what you tax, you get less of, and what operates free from tax, you get more of, there is no way a person can honestly say it is in the best interest of our nation to punish (i.e. tax) productivity and success.

    I respect the opinions of those that disagree, but all the arguments I have read so far either misrepresent the truth, or show a lack of understanding of the FT. I am waiting for a clear, logical, argument against the FT. Surely someone can make one, if it, in fact, exists.

  11. MSBassSinger says:

    One additional comment.

    No tax reform makes any sense unless the budget is also cut simultaneously. We have to have a Congress and a President willing to end government expeditures that are not mandated and allowed by the Constitution. If the enumerated powers don’t allow for it, then the federal government shouldn’t be spending money on it.

    If we don’t reduce the size and cost of the federal government, tax reform won’t matter. When the morons running the farm decide the kill the goose laying the golden eggs, does it really matter how feeding the goose is organized?

    Unfortunately, I don’t see a Congress or President with that attitude in our near future. When the Republicans squandered their chance to reform taxes and spending from 1994-2006, it ended our opportunity to see meaningful change for a long time.

  12. IndyInjun says:

    MSBassSinger,

    I am glad that you first favor cutting spending, then a flat tax.

    As for your assertion that folks against the FairTax have something to gain from the existing system, it is a parroting of Boortz and no argument at all. 99.9% of the people and probably 90% of legislators don’t have a clue as to how a USE tax works, the powers of auditors to go after individuals and companies for it, and how the FT piggybacks on these powers.

    As for my contention that business is exempted, it is in H.R. 25, which provides an exemption for purchases for any “bona-fide” business purpose. Contrast this with Georgia’s restriction that sales/use tax exempt purchases be “used directly in manufacturing” , be resold, or become integrated into a product. There are scores of pages of regulations narrowly defining what business can purchase exempt versus the FT’s “bona fide business purpose” standard.

    Beyond the broadness of the exemption, there is the practical matter that a business takes upon itself to self-assess and pay the tax when it gives an exemption certificate to a dealer. Once the dealer has the exemption cert, it is relieved of liability, and the payment of tax is on the ‘honor’ system.

    Florida has no state income tax because it applies sales taxes to business purchases broadly and extends the tax to all manner of services to business. Most business inputs with the exception of product components and labor are taxable. The same is true with Texas. So when you and Boortz cite these states as examples of where a FairTax is working, you are either intentionally misleading folks or you don’t know what you are talking about.

  13. MSBassSinger says:

    IndyInjun,

    Please read my posts before replying. You misrepresented what I wrote. I know my posts are often long, but given the ease with which my points are misrepresented, I need to provide enough detail to make the misrepresentation look foolish.

    As I said, I rarely get to listen to Boortz, so the insult of “parroting Boortz” is beneath you. I also said that I think for myself – I parrot no one. And I specifically said the FT doesn’t generally work at the state level. I never said Florida or any other state was an example of where it is working. I did mention states where it *could* work.

    I lived for a long time in a border county to Florida. Florida’s tax base includes significant tourist taxes. A lot of people in Florida’s border counties, including the state capital of Florida, cross the line and buy from Georgia stores, and even Georgia gas, which is usually cheaper. Fortunately, most of Florida’s population doesn’t live close enough to Georgia and Alabama to make much of a difference in sales statewide.

    Same with Texas, the population within 50 miles of the Texas border with New Nexico, Oklahoma, Arkansas, and Louisiana isn’t enough to affect sales tax losses.

    There is no place in the world that has a FT in place like we want. In 1787, there was no place in the world that had in place a government such as was being proposed at the Philadelphia Convention. There was no equivalent anywhere in the world to the Constitution the Founders developed. Just as they had the foresight to see its advantages over any other form of government, we need to look beyond conventional socialist ideas and see the advantages of a FT and reduced spending.

    Further, Congress and others in the Washington beltway know full well the power they wield in trying to control social and economic behavior via the tax code. Are you saying that doesn’t happen? It has been a mainstay of Democrats and Rockefeller Republicants for many decades.

  14. IndyInjun says:

    MSBS,

    Sorry for mistaking your position, but several comments track nearly identically with Boortz.

    The FairTax is a creation of lobbyists and was written to benefit capital intensive corporations, principally Big Oil. In fact research of the history of the Fairtax org shows that it began in Houston with founders in oil production and drilling. Among its early supporters were Shell Oil and Enron, who anted up the $millions to hire ‘expert economists.’

    To this day the ‘expert economists’ studies paid for by oil funds are cited by the Fairtaxers.

    My own research shows that there are in excess of $250 BILLION in deferred income taxes on the books of just 20 companies, with more than $50 billion held by the 3 mega oil companies. The day that the FT passes, these companies are forgiven these tax liabilities.

    Fairtax.org is a 501-c(3) organization that has an undisclosed list of corporate support. Just this year they leased 50 buses to haul in “supporters’ to the Iowa debates, raising questions about where the money came from and why.

    I just answered those questions.

    Maybe some folks think that Harvard Economists paid $millions accidentally came up with a scheme that so enriches their sponsors. Forgive me if I am more cynical than to believe that.

    The day it passes, Grandma gets a new tax of 30 cents on the dollar for her nursing home care.

    Some here think I go overboard with my opposition to the FT. So be it.

    Activists like me make it so that Grandma doesn’t have to worry about a “Fair” tax that ain’t.

  15. IndyInjun says:

    BTW, If Boortz wants to debate somebody, I will gladly accept that challenge in any neutral forum. I have plenty more where the above came from, which is from the Fairtax BILL.

    Wait, he says that he won’t debate the BILL, just the “concept” – whatever that is at the moment.

  16. MSBassSinger says:

    IndyInjun,

    Can you document your allegations about the FT being a child of the currently popular boogeymen (“big oil”)? Without some substantiation, it sures sounds like a typical left-wing conspiracy theory. What would oil companies stand to gain anyway?

    Also, assuming you are correct, what does it matter where a good idea comes from? The idea is not tainted because the oil industry is currently seen as some deep, dark evil.

    Third, your “30 cents on the dollar” is bogus. The math just doesn’t support it.

    I would like to hear Boortz (or perhaps someone a bit less abrasive) debate you or anyone else on the FT. I really don’t think you’d stand a chance in a real debate. The facts just are not there for your side.

  17. IndyInjun says:

    The billions in deferred income tax liabilities are clearly stated on the Balance Sheet contained in the SEC Form 10-K of Exxon Mobil, Conoco-Phillips, and Chevron-Texaco.

    Boortz even mentioned in the last book that Shell Oil was involved and there was a Houston Chronicle piece , no longer available online, that also mentioned that Shell provided the seed money for the ‘research’ Enron’s involvement came up during the investigations upon its fall.

    As for the 30 cents on the dollar tax, THE BILL requires that the retailer show the PRICE BEFORE TAX (Boortz and Linder continuously lie about this), the tax, and the total. If one divides the tax by the price, one gets 30% EVERY TIME.

    If it is bad, it is bad to me because it is a near total deception that hides the $trillion or so in outright gifts to corporations of money they owe, while double taxing retirees for SS, crushing states under a probably unconstitutional tax by the Fed government, and it puts a 30% tax on skyrocketing costs of health care and energy that are going up a lot faster than wages.

    YOU were the one who brought up the subject of lobbyists. I just explained that lobbyists are behind this deal from the start.

    I have already debated people on this including on talk radio. Face it, without 25 years messing with sales taxes in 16 or so states and without having bothered to read the BILL, they are not the ones with the advantage.

  18. MSBassSinger says:

    You still fall for the logical fallacy that an idea is tainted by the alleged immorality of those who support it. Hitler drank water, walked upright on 2 legs, and ate food. So do I. Does that mean I shouldn’t drink water, walk upright, or stop eating food? Of course not. Those things stand on their own, as does the FT.

    You also fall for the fallacy that corporate tax breaks are a “gift”. The corporations earned the money, and it is theirs (and their shareholders). Keeping it is not a gift. If a thief takes your wallet with $40 in it, and allows you to keep a $20 bill, did the thief give you a gift?

    Corporations do not pay taxes. Corporate taxes are always a part of the COGS and thus passed on to the consumer, who actually pays the tax.

    I never mentioned lobbyists. I meant Congressmen and bureaucrats. And just who are the lobbyists, now that you mention them, who are pushing against the FT? For that matter, to take a brief detour, why do we never hear about left-wing groups that lobby Congress, such as the Sierra Club and other wacko groups? They’ve done more damage to this nation than the right-wing and corporate lobbyists.

    Back to the matter at hand, as for the math, try this on for size:

    (Sale Price – Corporate Taxes) * 1.23 < (Sales Price * 1.3)

    I hope you don’t haul out the old socialist argument that businesses won’t pass on all or msot of their COGS reduction from removal of taxes. I suspect you have better sense that that.

  19. BubbaRich says:

    How do you decide what to exempt as “non-retail” or “used” sales? Anybody with money now knows enough about dodging taxes that they’d NEVER pay retail, which is for idiots anyway.

    You’d have to build up a huge body of law and a huge tax monitoring organization to keep even a small number of people paying taxes. And, of course, congress would need to keep tax breaks that people have constructed their entire lives around, such as home ownership and having children, and some congressmen may think that those behaviors contribute to society and need to be supported by the new tax policy, too. That will require a ton of laws to create (and regulate) such exceptions to the tax.

    Y’all really want that much tax law? It sounds familiar for some reason…

  20. MSBassSinger says:

    BubbaRich,

    Please read what the FT is before you criticise it.

    Retail sales tax collection is a process long worked out by the states. The vast majority of people pay retail or a negotiated retial price, and pay sales taxes on it now.

    You don’t need a “huge body of law” and all the other smoke screens you talk about. The FT simply overlays an existing sales tax structure.

    Why would you need a tax break for your mortage or anything else when you no longer pay income taxes? You really didn’t think your response through.

    Go to FairTax.org, read what they have to say, and then try making reasonable arguments if you still oppose the FT.

    IndyInjun is a good example of someone who makes reasonable arguements against the FT. He has shown he understands it, but takes issue with a few things that, in his mind, make the FT unworkable.

  21. BubbaRich says:

    I suspect IndyInjun agrees with the points I raised, and that you unsuccessfully tried to dodge. You need to look at these points again, since they’re fatal flaws in your thinking.

    1. People dodge retail sales tax. States get by, both because it’s not a huge amount of money, and because it’s a small enough tax that more people aren’t motivated to try to avoid it more. Multiply that tax by 5-10 times to cover both state and local taxes, and more people will dodge it using the existing methods. FairTax.org has a discussion of this in the FAQ. Read what even the fuzzy-headed people are saying about it:

    Since business purchases are not taxable, how does the FairTax keep individuals from pretending to have a business so they can buy things tax free?

    http://www.fairtax.org/site/PageServer?pagename=about_faq_answers#48

    2. You are still paying the same amount of taxes AS IF you did not own a house. Well, if you have built your personal economy around having a home to reduce your tax burden, that is rather a huge tax increase. If, of course, y’all are trying to keep it revenue neutral.

  22. mocamarc says:

    I should read Neil’s books to get that side of the story, but everything I read in the Wall Street Journal doesn’t shine brightly on the FT.

    I may be mistaken, but proponents of the FT talk of reduced bureaucracy by eliminating the IRS. But what about cutting and mailing of “pre-bate” checks? Isn’t that just more bureaucracy? It certainly isn’t cheap to do.

  23. IndyInjun says:

    MSBS wrote “I never mentioned lobbyists.” after writing “Congress and others in the Washington beltway know full well the power they wield in trying to control social and economic behavior via the tax code.” The later statement sure sounded like we were speaking of lobbyists.

    Then there was this: “Corporate taxes are always a part of the COGS and thus passed on to the consumer, who actually pays the tax.” Well, in the case of the deferred taxes they have already been passed onto the consumer, so shouldn’t the consumer get the tax cost reduction, instead of a new tax to make up the revenue loss?

    Then this :”(Sale Price – Corporate Taxes) * 1.23 < (Sales Price * 1.3)” The FT is not figured that way. The Fairtax is .23 times (Price plus Tax) which is 30 cents on the dollar.

  24. IndyInjun says:

    MSBS wrote: “Retail sales tax collection is a process long worked out by the states. ”

    Not really. Taxing internet and mail order sales has long been the holy grail for the states, but it depends on getting the states to agree on uniform sales tax rules. After a quarter century, they still cannot do it.

    You don’t need a “huge body of law” … The FT simply overlays an existing sales tax structure.”

    Actually there is a substantial body of law underlying the states’ sales taxes. For example, In GA, there was a Supreme Court decision that mandates that individual taxpayers keep records of tax payments, verifying the right of the state to audit such records, and to estimate a tax liability in the failure of the taxpayer to keep records. That case right there, gives the FT auditor the same intrusive powers that the “eliminated” IRS was so hated for.

    Of course the FT site doesn’t tell folks this nor does it tell them that the FT BILL requires that receipts be kept and also puts liability on the consumer. Instead it speaks of doing away with these things.

  25. IndyInjun says:

    moca wrote “But what about cutting and mailing of “pre-bate” checks? Isn’t that just more bureaucracy?”

    Exactly. And it doesn’t stop there for the FT BILL requires the continued reporting of employee wages to the SSA.

  26. IndyInjun says:

    Bubba,

    Conversion of business exemptions is one achilles heel of any sales tax. At the rates of this tax, you are correct that the evasion will be great. Auditors will have to comb the records for such things as company trucks driven home, employee purchases, and goods/services donated to consumers.

  27. Dave Bearse says:

    Late to this thread…

    Bubba’s right. Very few currently risk jail to avoid a few percent sales tax. Dodging a 37+% sales tax (including state and local and possibly state sales tax increase when the state income tax becomes impractical upon abolishment of federal income tax) is a different matter.

    Then consider the Georgia GOP General Assembly exempting sales tax on ice used in the transportation of poulty and vegetables enacted a couple of years ago, and this years exemption of sales taxes on fuel used in swine raising, to see the FT future—special exemptions, a raft of regulations, and in combination with the above, an IRS-sized enforcement agency. (I included GOP in connection with the General Assembly only because presumably FT draws its support from GOP ranks, not that Dems are any better on tax issues.)

    On a personal note, I have a BIG problem with forgiving deferred income taxes… Only corporations and the rich benefit.

    Federal (26%) and state (6%) income, and FICA (7%+) taxes haved shaved 40% off the top of a half-lifetime of savings. Now with retirement on the horizon, the FT will clip me for a another full 37+% when the savings are withdrawn for retirement living expenses.

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