Philpot v. Matheson Debate and the FairTax

After listening to the debate (if you haven't listened click here) I kept thinking about Matheson’s oft repeated refrain that Morgan wants to tax everything you buy at 23% and in reality that rate would likely be 30%. There is some truth to this statement but Matheson leaves a lot of information out as well.

 

What Morgan has said on a couple of occasions is that he could support a national sales tax such as the proposed Fair Tax Act of 2005 (HR 25 and S 25) which call for a 23% sales tax on all new goods and services. This proposal is explained in detail by the Americans for Fair Taxation on their website www.fairtax.org for those who want to learn more.

 

What Matheson left out was that the fair tax initiative would only be enacted if the 16th Amendment was repealed (this is the one that gives the federal government the right to tax our income) and it abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes.

The FairTax replaces the revenue collected by the taxes enumerated above with a national sales tax. It was designed to be revenue neutral. So if we are bothered by 23% (or in 30%) sales tax then our anger should be directed at those in government who are spending our money at a rate equivalent to that kind of a sales tax. As someone who has been in office for 10 years and voted for the stimulus bill, cash for clunkers and numerous other programs Matheson should be the last person who would want talk about issues related to the cost of government.

 

What I love about a sales tax versus an income tax is that it decreases the federal government's involvement in my life. No longer do they need to concern themselves with how much I make and my sources of income. Nor do I need go through an annual exercise in determining how much I owe the government. If I’m wrong and underpay I’m subject to varying degrees of penalties and interest charges. However, if I overpay the government then, oh well, the government has benefitted from my money but only pays me the principle back. The more I think about it the more I like the idea of a national sales tax (again, if and only if the 16th amendment is repealed).

 

Back to the debate, I have the mental picture of Matheson waving his finger at Morgan and touting how naive he would be to consider a tax program like the FairTax which could impact the economy in such as negative way. Tell me again Mr. Matheson, how a program which takes the same amount of money from us but eliminates the IRS, means I don’t have to file income tax reports, and has the potential to generate income from people who currently don’t pay income taxes (criminals, workers paid on a cash basis …) is bad. That finger and the self-righteous attitude that goes with it should be more introspective.

 

I looked (see When is a Blue Dog only a Mirage?) and at no time in his last term in office did Matheson cast a deciding vote or was even one of several deciding votes on spending bills that were conservative in nature. Any votes against bills that I feel were terrible such as ObamaCare were cast only after the fix was in for these monstrosities.

 

I loved Morgan’s comment that he fully supports Milton Friedman’s stance that “I am in favor of cutting taxes under any circumstances and for any excuse, for any reason, whenever it's possible.” Additionally, I thought Morgan’s comment that he thought Matheson’s assertion that a 23% or higher sales tax was necessary simply reflected the typical Washington attitude that spending must increase not decrease.

 

We need people like Morgan in office who will seek to cut taxes and spending wherever and whenever possible.

 

Go Morgan!

 

By the way did you know that 9 states have no personal income tax and use a state sales tax  (Alaska, Florida, Nevada, New Hampshire, South Dakota, Texas, Tennessee, Washington, Wyoming)? And how do they rank in a survey of the best and worst managed states in America (note, Utah was 6th).

• (14) Alaska
• (42) Florida
• (41) Nevada
• (8) New Hampshire
• (13) South Dakota
• (36) Texas
• (35) Tennessee
• (15) Washington
• (1) Wyoming

The average ranking was 22. So these states are in general better than average and don’t burden their citizens with annual income tax filing nor do they invade their privacy. So tell me again Mr. Matheson how terrible the FairTax concept is and why I shouldn’t vote for Morgan because he said he would consider such a proposal. Maybe I shouldn’t vote for you because you think it is such an awful idea. Good idea. I think I’ll do that :)

  

Go Morgan!