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What it's all about: The Book
The Book, "The FairTax Book", written by right-wing radio talk show host Neal Boortz, is the basis for and Bible for a recent right-wing cult-like movement to replace the current US tax code with a national sales tax. We suggest you familiarize yourself with it by purchasing or borrowing the book from your local library. We want you to be as informed as possible so that you can make a logical decision based on facts, and not on party loyalty or hype.
We consider the FairTax to be nothing more than a smokescreen for a huge tax cut to the wealthiest Americans and a gigantic tax increase for everyone else to make up for it. As you read, ask yourself what you would get from this plan if it was ever made into law. With critical thinking you will find that the FairTax is not only a lie and a scam, but it will throw many Americans into permanent poverty. We believe the FairTax plan taxes hard work - the sweat of our brows and the toil of our labor - while at the same time it makes free welfare money (inheritances, gifts, and capital gains), that wasn't worked for and wasn't earned, completely tax free.
The FairTax increases the size of government making all who sell or trade part of the Big Brother network. This new tax bill gives the government additional powers to rule the poor and literally grants additional rights to the wealthiest people in America. George Orwell would have been proud.
The FairTax is ANTI-FAMILY. The FairTax penalizes poor families for buying food, clothes, shelter, and medical care by taxing all the basic necessities of life. These things are NOT taxed right now (and shouldn't be) but they ARE HEAVILY TAXED under the FairTax plan. Remember this when you get barraged by a FairTax supporter that says the prebate will give you a portion of this additional tax back and you should be grateful to the new Big Brother Government for giving you anything back. The FairTax bill penalizes those who live paycheck to paycheck taxing every dollar spent to make ends meet while UN-TAXING the rich and wealthy who live off of inheritances, trusts, gifts, and old money.
The FairTax Plan
Various Fairtax sources describe the plan as follows:
The FairTax a proposal for changing United States tax laws to replace all federal income taxes, payroll taxes, corporate taxes, capital gains taxes, self-employment taxes, gift taxes and inheritance taxes with a national retail sales tax and monthly tax rebate to households of citizens and legal resident aliens. The FairTax would be levied at the point of purchase on new goods and services. The plan would abolish the Internal Revenue Service and create a federal "Sales Tax Bureau" to oversee collection of the tax by existing state sales tax administrations. While the FairTax replaces taxes like FICA, it does not remove or change any government funded programs such as Social Security, Medicare, or Medicaid.
The FairTax plan was created by the Americans for Fair Taxation, a mostly conservative tax reform advocacy group. Using a $20 million gift the group developed the plan by using interviews, polls and focus groups, and then having a team of economists research and design a tax system that met those demands. The plan was given the name FairTax during one of the focus groups. The FairTax Act of 2005 was introduced into the 109th United States Congress by conservative John Linder as H.R. 25 in the House of Representatives and as S. 25 in the Senate and has attracted more cosponsors than any other fundamental tax reform bill introduced. Nearly 100 million dollars has been raised to market, lobby for, and promote the final bill.
Interestingly enough, none of the $20 million plus spent on research material mentioned in the book has ever been published for review. The book says the FairTax idea was started by an unnamed Texas businessman that served on the boards of several unnamed corporations (Chapter 7, pg 69, "The Birth of The FairTax"). The original "participants" and "focus group members" are also unnamed. In fact, the entire chapter on the birth of the FairTax contains no names of founders or participants at all. The Americans for Fair Taxation has a website with a section on the founding researchers. Unfortunately, they fail to name anyone either - just list generic links to 4 colleges and 3 right-wing conservative think-tanks. Even the white-papers contain no references or names.
According to other sources Leo Linbeck Jr., a Conservative Texas billionaire that inherited his wealth from billionaire daddy Leo Linbeck Sr., is the man behind the FairTax. His two collaborators were billionaire Houston Texans owner Bob McNair and attorney/Houston Industries director Jack Trotter. They are all huge donators to the right-wing Political Action Committee known as "Club For Growth" and the Republican National Committee.
The start-up money provided by the founding billionaires ($20 million plus) that was supposedly spent on "fair taxation research" went to conservative think tanks like the Heritage Foundation, the conservative Jim Baker Institute, right-wing Cato Institute, formerly centrist NBER, and four retired conservative professors with connections to prestigious universities who had previously published papers showing consumption taxes in a favored light. As of this writing there are no published research studies, no studies of other tax systems, no published comparisons, no published methodologies, and nothing at all to indicate that this "research" ever happened. As of right now there are nearly as many mainstream economists supporting the FairTax as there are mainstream scientists supporting intelligent design. (i.e. a very tiny handful)
Interestingly enough, the FairTax website has a section they call "Research Papers" consisting of mostly of fliers and brochures in PDF format. What they are calling "research" is nothing more than anonymously authored talking points, testimonials, and articles written by sales-tax friendly commentators. There was no research in the academic sense at all. There were no studies of taxation in other countries, no historical analysis of tax systems that worked and failed. There were no studies - no control groups, no hypothesis, no experimental groups, no findings, and no real research. There were no published findings, no peer reviews, no error analysis, and no invitations for other to participate in the so called "research." The whole thing is nothing more than politically based opinion.
The various pro-FairTax sites simply parrot what's in the book -- expensive research was done by so-called experts to come up with the perfect tax plan. However, none of the pro-FairTax people can point to any links, notes, or anything else that would indicate that this this supposed research actually happened. If it was done at all it is still a secret or won't be published because it would not stand up to review. This has lead many to believe that the whole consumption tax idea may be just a smoke screen for the real goal: eliminating the estate, gift, and capital gains taxes. Critics point to what is taxed by the FairTax -- food, healthcare and housing; as opposed to what is tax-free -- estates, gifts, and capital gains. It doesn't take a genius to make this connection.
One of the main problem areas of the FairTax is that in order to work as designed, many tax laws in America would have to be repealed - including the Sixteenth Amendment. If the Sixteen Amendment is not repealed (by a separate action or bill) the FairTax can be added-to, layer upon layer of new taxes. If the existing tax laws (including most state tax laws) are not repealed too then the system won't work as designed. We think this is intentional - because the other needed laws will not be passed, the tax plan will assuredly fall apart and it will result in more taxes for the middle class - but not reinstatement of the estate tax, gift tax, or capital gains taxes!
Place your bets and keep your eyes off the man behind the curtain!
In all fairness you should visit the internet home page for the FairTax Plan on the Americans for Fair Taxation web site to hear what the proponents of the plan say. Unfortunately, you will not see any two-sided discussions or links to opposing views on that site. But you can view one-sided pro-FairTax rebuttals for unseen news stories that are not linked to or referenced in any way.
There are several pro-FairTax websites that any fair minded individual would want to visit first before relying on information contained in this website. Some sites of interest are as follows:
FairTaxBlog.com - is a discussion of the FairTax and it's implications. They
do allow opposing viewpoints.
FairTaxPodCast.com - is another discussion of the FairTax and other topics. They do allow opposing viewpoints.
FairTax4All.com - is an informational site with a good overall emotional appeal.
FairTaxScoreCard.com - tracks the H.R.25/S.25 bills and congressmen supporting them, tax calculators.
Some of the not-so-fair FairTax websites that I didn't mention don't like questions that can't be answered in their favor. Asking hard questions will get your question deleted and get you deleted from their user base. Most members of these sites will flame you for asking difficult questions. While some of the Pro-FairTax sites boast large memberships, none of them will identify their leaders, their membership, their location, or even make a mailing list available. It's pretty much a small group of anonymous people and Neal Boortz with a few billionaires providing the money and direction.
Please notice that we at FairTaxFraud.com actually link to the pro-FairTax websites as we welcome discussion and are not afraid to let you make your own decisions. However, they will not link to us. If they were really as legitimate as they claim, they should welcome the opportunity to discuss the issues.
Here's what you won't find on any FairTax website or in the book
What do pro-FairTax websites and books never mention? Answer: How the FairTax treats the Super Wealthy. Every argument they make leads you to believe that the FairTax "untaxes" the poor by providing a magical monthly check that covers all their basic needs, but at the same time it "untaxes" the rich by taking away all business taxes, estate taxes, gift taxes, and capital gains taxes. Yet all this is supposed to pull in the same revenue as the old tax system. Well, if the poor are paying less taxes, and the rich are paying less taxes, and it's still revenue neutral, then who pays the taxes to make up for the cuts in the poor and rich classes? Hmm...can you say middle class?
The charts that Boortz uses, and all the website examples of how the FairTax works never consider incomes over $250,000. That is supposed to be "rich" according to Boortz. They also set the middle class range too low. Well if you follow the examples provided then the poor ($0-$10,000 per year) will pay little, the middle class ($10,000 - $50,000 per year) will pay a little more, and the wealthy ($50,000 to $250,000 per year) will pay the most. Mysteriously, there is no mention of anything over $250,000 per year. In the FairTax literature nobody makes that much money so they don't talk about it or deal with it. They sweep that really wealthy class under the rug so we don't look at it.
No, lets take a moment and look at it. Three percent of the people in the United States own nearly 70 percent of the wealth. Many of these people, from the moment they are born, never have to work. They simply draw money from accounts set up for them that earn interest - every kid gets one - think Paris Hilton. If the FairTax becomes a reality all that "free income" is suddenly tax free too. They don't need houses or cars (they get them as gifts from rich family members - also tax free under the FairTax). The only things they would need to buy are food, electricity, heat, gas, and health insurance (taxable under the FairTax). With the FairTax billionaires can keep all the rest tax-free to hand to the next generation tax-free. These are the same heirs of billionaires who didn't work for the money that complain the loudest about "taxing success".
A poor person can spend a week's income on heat and electricity for the month. After rent, clothing, and food they are pretty much tapped out (but because they spend everything they make on consumption, they are taxed on 100 percent of their income. Under the FairTax a typical billion dollar heir already has a tax-free house, and tax-free income so they only spend a tiny percentage of their income on basic needs - which means they are only taxed on a tiny percentage of their income under the FairTax. The result is pretty evident -billionaires get a free ride while the poor get shafted.
The next time you talk to a pro-FairTax person, have them compute what percentage of income that is taxed under the FairTax, by comparing a middle class person making $75,000 per year to a billionaire who inherited a home, car and has an all-interest income from a trust or inheritance. Boortz deliberately hides the super wealthy incomes from his book, charts and figures so you won't realize how badly you are being screwed. If you think the loopholes are bad now, the FairTax will force the average billionaire to be taxed on less than 5 percent of his income while the poor get their whole income (100%) taxed because they spend it all on consumption.
See our chart comparing income to the percentage of income taxed under the FairTax for the truth.
The House and Senate Bills
The US House bill for the Fair Tax (HR 25 The Fair Tax Act) can be found here. As of this writing the bill has 56 co-sponsors in the House - all of them are Republican. The Senate bill (S 25 The Fair Tax Act) can be found here. The bill has 3 cosponsors in the Senate - all Republican. This means that neither the House or Senate bill is bi-partisan as all sponsors and cosponsors are Republican.
Rep. John Linder [R-GA] Cosponsors Rep. Todd Akin [R-MO] Rep. Spencer Bachus [R-AL] Rep. Richard Baker [R-LA] Rep. Roscoe Bartlett [R-MD] Rep. Michael Bilirakis [R-FL] Rep. Henry Bonilla [R-TX] Rep. Jo Bonner [R-AL] Rep. Kevin Brady [R-TX] Rep. Henry Brown [R-SC] Rep. Dan Burton [R-IN] Rep. John Carter [R-TX] Rep. Michael Conaway [R-TX] Rep. Ander Crenshaw [R-FL] Rep. Barbara Cubin [R-WY] Rep. John Culberson [R-TX] Rep. Jo Ann Davis [R-VA] Rep. Nathan Deal [R-GA] Rep. Thomas DeLay [R-TX] Rep. Thelma Drake [R-VA] Rep. John Duncan [R-TN] Rep. Tom Feeney [R-FL] Rep. Jeff Flake [R-AZ] Rep. Trent Franks [R-AZ] Rep. John Gingrey [R-GA] Rep. Kay Granger [R-TX] Rep. Samuel Graves [R-MO] Rep. Gilbert Gutknecht [R-MN] Rep. Ralph Hall [R-TX] Rep. Joel Hefley [R-CO] Rep. Jeb Hensarling [R-TX] Rep. Duncan Hunter [R-CA] Rep. Ric Keller [R-FL] Rep. Steve King [R-IA] Rep. Jack Kingston [R-GA] Rep. Jerry Lewis [R-CA] Rep. Michael McCaul [R-TX] Rep. John Mica [R-FL] Rep. Gary Miller [R-CA] Rep. Jeff Miller [R-FL] Rep. Jerry Moran [R-KS] Rep. Sue Myrick [R-NC] Rep. Randy Neugebauer [R-TX] Rep. Robert Ney [R-OH] Rep. Charles Norwood [R-GA] Rep. Steven Pearce [R-NM] Rep. Ted Poe [R-TX] Rep. Tom Price [R-GA] Rep. Michael Sodrel [R-IN] Rep. Clifford Stearns [R-FL] Rep. John Sullivan [R-OK] Rep. Thomas Tancredo [R-CO] Rep. William Thornberry [R-TX] Rep. Todd Tiahrt [R-KS] Rep. Lynn Westmoreland [R-GA] Rep. Donald Young [R-AK] Rep. Geoff Davis [R-KY]
Sen. Saxby Chambliss [R-GA] Cosponsors Sen. Thomas Coburn [R-OK] Sen. John Cornyn [R-TX] Sen. John Isakson [R-GA]
The Crook and the Radio Show
The spokesman and cult leader of this national sales tax group is Neal Boortz, a failed-lawyer turned radio show shock-jock and author. He's the mouthpiece and chief lobbyist for the conservative Americans for Fair Taxation Political Action Group. While he claims to be libertarian, most well-known libertarians disagree with him on most issues. His on-air political viewpoints nearly always parrot those of right-wing radio talk show host Rush Limbaugh and NeoCon radio host Sean Hannity; with the possible exception of religious issues and his degree of racism and whining.
Most Liberals consider Boortz to be nothing more than a loud-mouthed con-man and clown. Why are we slamming the guy? Why is all this background important? Answer: To show you just how out of step he and his ideas are with society. It's also a matter of trust. Would you trust a person that debases and ridicules people like you or causes that you believe in? Of course not. There is no opinion here - just follow the links below to REAL factual events. Then make up your mind on whether you trust this guy and his tax plan.
On July 19th, 2006 he claimed that the mother of an American fallen Iraq war hero was a "lunatic", a "moonbat", and a "crazy broad" that would rather live under Hugo Chavez in Venezuela than George Bush in America. On that same show he also declared Islam a religion of "violent, bloodthirsty cretins" and called Prophet Muhammad a "phony rag-picker"
That's not the only patriot and war hero that Neal Boortz has attacked. On February 17, 2004 Boortz stated, "The truth really needs to be told about John Kerry's Purple Hearts. A case can be made that he's a coward." Boortz continued, "He received three wounds, and he was in and out of Vietnam in four months," Boortz noted. "They were all minor wounds." A week later, Boortz's website made the same point, describing Kerry's Purple Hearts as "flesh wounds" for which he wrote his own commendations -- while George W. Bush "earned exemplary ratings" as an Air Guard pilot.
On June 6th, 2006 he debased the Hurricane Katrina Refugees by saying, "I love talking to you about these Katrina refugees. I mean, so many of them have turned out to be complete bums, just debris. Debris that Hurricane Katrina washed across the country."
Boortz seems to hate victims too. In April 2007 he blamed the victims of school shootings at Virginia Tech calling them "Wussies" for not fighting back.
Boortz often says things that indicate that he hates poor people. Even before his minimum wage comments, on the October 14 broadcast of his daily radio show, right-wing radio host Neal Boortz stated that if the country is faced with an impending national disaster, it should make it a higher priority to save rich Americans rather than poor Americans. So much for Jesus Christ, Mozart, Gandhi, etc that died penniless - I guess they were worth even less (not being American and all).
His comments on his radio show have proven (time and time again) that he neither cares for nor supports the poor or middle classes. On August 3rd, 2006 he claimed that poor people on minimum wage were "incompetent", "ignorant", "stupid", "worthless," and "pathetic".
On September 30th, 2005 Boortz responded to a letter to the editor of The Atlanta Constitution written by Sam Marie Engel that discussed how the poor victims of the flood were kept out of gated communities when they needed assistance. He implied the victims were petty thieves, burglars, rapists and murderers.
On August 28 of 2007, Boortz had his most vicious all-out attack on the poor. Quoting an article from the ultra-right-wing Heritage Foundation, he blasted the poor saying: "46 percent of all poor households actually own their own homes." Translation: all those retired people on fixed incomes don't deserve homes. He also said, "Nearly three quarters of poor households own a car; 31 percent own two or more cars." Translation: Those living on the street with two (20 year old) cars are considered a two bedroom home owners by Boortz. He topped it off with, "78 percent own a VCR player." Translation: the poor are just wallowing in old technology you can't even buy anymore. Boortz also seems to believe that being poor is a choice that can be cured if only single mothers would marry the fathers of their children. With this kind of logic the FairTax plan can hardly go wrong! Right?
Boortz is a well-known racist whiner. In March of 2006 he lashed out at another high-ranking Black female public official – Georgia Democratic Rep. Cynthia McKinney – calling her a “ghetto slut” and ragging on her hairdo by saying she looked like “Tina Turner peeing on an electric fence.”
In June 2007 Boortz made a racist swipe at Mexicans and Latinos while talking about building a fence on the Mexican border. He said, "I don't care if Mexicans pile up against that fence like tumbleweeds in the Santa Ana winds in Southern California. Let 'em. You know, then just run a couple of taco trucks up and down the line, and somebody's gonna be a millionaire out of that."
After hearing that Muslims were outraged at a comic strip depicting their spiritual Mohammed he decided to attack at a Muslim caller on the air who was saying that Islam is a religion of peace. He ranted, "Muslims fly commercial airliners into buildings in New York City. No Muslim outrage. Muslim officials block the exit where school girls are trying to escape a burning building because their faces were exposed. No Muslim outrage. Muslims cut off the heads of three teenaged girls on their way to school in Indonesia. A Christian school. No Muslim outrage. Muslims murder teachers trying to teach Muslim children in Iraq. No Muslim outrage." His last gripe ends with, "Newspapers in Denmark and Norway publish cartoons depicting Mohammed. Muslims are outraged."
In October 2006 Boortz called the religion of Islam a "deadly virus" and suggested we need a vaccine to fight it.
In August 2007, Boortz stated that Muslims were like "cockroaches" because "Muslims don't eat during the day during Ramadan" and "fast during the day and eat at night."
Boortz also thinks teachers are terrorists. On Fox News’s Hannity and Colmes, right-wing radio host Neal Boortz claimed that teachers unions are “destroying a generation” and are “much more dangerous than al Qaeda.” He constantly criticizes what he calls "government schools" and the public school teachers that are not up to the job of educating the young. He refers to public education as "taxpayer funded child abuse."
In 1992 Boortz used his fame/wealth to lobby local government for real estate for private clubs for his buddies and called criticism "wealth envy".
Speaking of wealth, Boortz hates it when other rich people "give back" money to society. When Warren Buffet and Bill Gates announced they were "giving back" the majority of their fortunes to thank America for all the advantages and blessings, Boortz was outraged. Adding fire to the pot was the article by Edward Rubin suggesting that most millionaires (not including Buffet of Gates) inherited their money and didn't earn it so they "owed" something to America (at least the taxes on the money that they got for free.) Boortz believes that the rich should stay rich and in power, no matter where the money came from, no matter if they earned that money or not. This very much explains why he is so insistent on repealing the inheritance tax, gift tax, and capital gains tax - because he believes that only money you earned should be taxed and money you got for free as a gift should not be - exactly opposite of common sense!! It's like he's on a crusade to "punish the poor" for some unknown psychological reason. (Maybe he was raped by a poor man as a child or something).
In 2005 Boortz referred to Estate Tax proponents as "followers of Karl Marx". Boortz believes in getting unearned welfare money simply because you were yanked out of the right crotch at birth and is an admirer of that symbol of unearned wealth and power, Paris Hilton. The fact is the inheritance tax only applies to less than one percent of the population is lost on Boortz.
Boortz has been know to just plain lie too. In July 2007 he falsely stated that former President Clinton was convicted of perjury. Boortz falsely claimed that "Scooter Libby and Bill Clinton got sentenced and convicted for exactly the same crime." Libby was convicted by a jury and was pardoned by George Bush. Even after several callers corrected him, he still insisted he was right.
Can anyone seriously trust this shock jock, racist, liar to come up with a comprehensive tax plan that is fair to all Americans? Think about it. You would have to be a fool to believe it.
Most people that support the FairTax are not crazy racist wing nuts like Neal Boortz. Some are just hard working people fed up with paying taxes and getting nothing for their money. The older ones are generally poor and lower middle class, the younger ones are kids in high school and college getting their first taste of politics. However, a few are cult-like and fueled by Neal Boortz's daily radio propaganda. To them, any change that strikes at the heart of the symbol of government power (the IRS) is worthwhile. Unfortunately, those that crafted the plan and those who are being recruited to promote the plan come from two opposite ends of the economic spectrum. The plan neither shrinks government nor does anything to eliminate the IRS (other than rename it).
The plan itself cuts no taxes for the poor or middle class. However, it does cut taxes for the super rich though. The estate tax (required tax on estate wealth valued over $2.2 million dollars) is paid by less than 12,000 people in the United States. However, for the few astronomically rich that actually pay it, this estate tax is a sizable chunk of the United States revenue and will have to be made up by someone (the poor and seniors on social security) if cut. The plan also cuts the gift tax for the rich (unless your a poor person giving away a yacht or house as a gift). It also cuts out capital gains taxes. Again, most old-money wealthy people live on this capital gains money. To make this money tax free would be a crime.
The problem with the plan is it taxes money that was worked for and earned (at a job) but removes taxes from money that was not worked for and not earned (like inheritance, gifts, and capital gains). Under this plan only people that work for a living will actually pay taxes. Money, houses, and property that are not earned and not worked for but given as gifts or as parts of estates will be totally tax free. Money you work for at a job is taxed when you try to buy a house, goods, food, heat, medicine, or property. The rich, with many houses, cars, boats, etc. can merely pass them to the next generation on non-workers completely tax-free.
Special note for any person who still can't figure out why we call these people freeloaders. Obviously, when a person dies they are gone and something has to be done with their money. They are dead now. They can not be taxed at this point no more than a ghost can. We are not saying take the dead persons money and give it to the government. We are saying this: When a person gets free money be it a lottery, inheritance, or gambling winnings it should be treated as INCOME and TAXED just like everyone else has to pay TAX on their "worked-for" income. It IS fair to leave the kids some money. It is NOT fair for the super rich to leave billions TAX FREE. It's a real simple concept.
Tax relief can be done fairly. See the tax alternatives section for this information. The biggest existing tax that needs cutting in the federal government is the "debt tax" and could be remedied by a Balanced Budget Amendment that would prevent Congress and the President from borrowing money under any circumstances.