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Why the FairTax Army Grows
By Ken Hoagland

More than 8,000 people of every political persuasion recently came to the Carolina Coliseum to make a point.

They wanted America – and every GOP presidential candidate at the debate – to know that there is a better way to collect federal revenues for the common good.

It is called the FairTax, and it is an extensively researched proposal and legislation to replace the dysfunctional income tax system with a progressive national retail consumption tax.

The FairTax is gaining national attention and widespread grassroots support because, unlike every other tax debate over the past fifty years, it does not pit one income group – or political view – against another.

At the same time that all federal taxes on the poor are eliminated under the FairTax (through a universal rebate), capital gains taxes, corporate taxes, and "inheritance taxes" are eliminated as well as all payroll taxes and federal withholding. Elimination of federal withholding and payroll taxes means, of course, that every wage earner takes home their entire "gross" pay.

As well, the FairTax gives the middle class a tremendous tax improvement, reducing effective lifetime tax rates dramatically. Every income level can be benefited because the FairTax creates a far broader base for taxation – consumption – than the current ineffective, loophole-ridden, and costly system of taxation of earnings. The "underground" economy totaling trillions of dollars contributes to the federal government for the first time, and 12 to 20 million illegal immigrants become taxpayers as consumers.

There is a "catch," however, and that is why so many people were inspired to travel to Columbia from all over the country for a Tuesday evening FairTax rally. The "catch" is that enactment of the FairTax eliminates Congress's ability to grant favors in the income tax system. Taking power away from Congress is, of course, a huge political challenge requiring overwhelming grassroots pressure and an abiding belief that public policy can be made to simply favor the public, despite the self-interest of Congress.

While the FairTax has the potential to unite a divided country against the self-dealing of Congress, the growing popularity of the FairTax has also inspired bipartisan distortions of the proposal by Washington, D.C.-based political operatives threatened by the very idea of a tax system free from congressional mischief.

Most commonly, the proposal is derided from the left as being unfair to the poor despite the fact that, unlike every other sales tax, the FairTax is not regressive and actually untaxes the poor entirely. From the right (and sometimes the left), D.C. operatives like to claim that the FairTax represents a tax increase on everyday goods, conveniently ignoring the fact that every respected economist who has studied the FairTax has concluded that retail prices will actually drop as huge "embedded" income tax costs are eliminated from the cost of producing everything from a loaf of bread to a gallon of gasoline.

FairTaxers, passionate in their desire to see the broken income tax system jettisoned, take such criticism in stride as the cost of advancing an issue that did not start in Washington, D.C. They are less understanding of why national media sources have been so ill-tuned to the growing national movement that has won 60 congressional co-sponsors and at least one fervent presidential candidate (Mike Huckabee).

In the last 11 months, FairTax rallies in Columbia, Atlanta, and Orlando have seen thousands of citizens, bedecked in FairTax shirts and hats and waving placards, wildly cheer advocates like talk show host Neal Boortz, Fox News pundit Sean Hannity, and ABC News reporter John Stossel. But more than celebrating their celebrity, FairTax supporters have welcomed these men as fellow citizens embarked on a democratic journey to force the public will on a largely unresponsive representative government.

Even if the fact that the current income tax system is killing the "Made in America" label, from textiles in South Carolina to automobiles in Michigan to steel in Pennsylvania, and is driving trillions of American dollars offshore, Congress will only be moved on this issue by direct grassroots advocacy that threatens the tenure of elected officials. In this, the FairTax grassroots army largely sees our campaign as a test of whether our Founding Fathers' promise of a government "of, by, and for the people…" can still be made to come true. The irony that a nation first conceived in the midst of a tax protest should, hundreds of years later, have citizens struggling again to overturn a universally despised tax system primarily supported by tax lobbyists and elected representatives jealously guarding their own power to manipulate taxes has not been lost on the growing FairTax army. While sometimes indignant, increasingly this citizen army has simply adopted the attitude that "the world is what we make it."

Our nation has wondered long enough about the complex and destructive patchwork quilt of political favors called the income tax system and asked "why?" It is high time, in Bobby Kennedy's words, to instead ask "why not?" about a fairer, simpler, and more effective means of collecting federal taxes.

Ken Hoagland is the National Communication Director of and a long time public policy advocate and consultant.


1. Ian said, May 31st, 2007 at 12:46 PM

Here is why the FairTax will make a good U.S. tax system REPLACEMENT.

The FairTax is:

•SIMPLE, easy to understand
•EFFICIENT, inexpensive to comply with and doesn't cause less than optimal business decisions for tax minimization purposes
•FAIR, loophole free and everyone pays their share
•LOW TAX RATE, achieved by broad base with no exclusions
•PREDICTABLE, doesn't change, so financial planning is possible
•UNINTRUSIVE, doesn't intrude into our personal affairs or limit our liberty
•VISIBLE, not hidden from the public in tax-inflated prices or otherwise
•PRODUCTIVE, rewards, rather than penalizes, work and productivity

Its benefits are as follows:


•No more tax on income - make as much as you wish.
•You receive your full paycheck - no more deductions.
•You pay the tax when you buy "at retail" - not "used."
•No more double taxation (e.g. like on current Capital Gains).
•Reduction of "pre-FairTaxed" retail prices by 20%-30%.
•Adding back 29.9% FairTax maintains current price levels.
•FairTax would constitute 23% portion of new prices.
•Every household receives a monthly check, or "pre-bate."
•Pre-bate equals payback for taxes on spending to poverty level.
•FairTax's pre-bate ensures progressivity, poverty protection.
•Finally, citizens are knowledgeable of what their tax IS.
•Elimination of "parasitic" Income Tax industry.
•Those possessing illicit forms of income will ALSO pay the FairTax.
•Households have more disposable income to purchase goods.
•Savings is bolstered with reduction of interest rates.


•Corporate income and payroll taxes revoked under FairTax.
•Business compensated for collecting tax at "cash register."
•No more tax-related lawyers, lobbyists on company payrolls.
•No more embedded (hidden) income/payroll taxes in prices.
•Reduced costs. Competition - not tax policy - drives prices.
•Off-shore "tax haven" headquarters can now return to U.S.
•No more "favors" from politicians at expense of taxpayers.
•Resources go to R&D and study of competition - not taxes.
•Marketplace distortions eliminated for fair competition.
•US exports increase their share of foreign markets.


•7% - 13% economic growth projected in the first year of the FairTax.
•Jobs return to the U.S.
•Foreign corporations "set up shop" in the U.S.
•Tax system trends are corrected to "enlarge the pie."
•Larger economic "pie," means thinner tax rate "slices."
•Initial 23% portion of price is pressured downward as "pie" increases.
•No more "closed door" tax deals by politicians and business.
•FairTax sets new global standard. Other countries will follow.

Here's the link to the published article: