Politics: August 2007 Archives

Policy analysts have come out swinging on the topics of the Fair Tax (national sales tax) and public-private toll roads. The language goes beyond dry analysis. Here's Bruce Bartlett in the Wall Street Journal on the Fair Tax:

For those who never heard about it, the FairTax is a national retail sales tax that would replace the entire current federal tax system. It was originally devised by the Church of Scientology in the early 1990s as a way to get rid of the Internal Revenue Service, with which the church was then at war (at the time the IRS refused to recognize it as a legitimate religion). The Scientologists' idea was that since almost all states have sales taxes, replacing federal taxes with the same sort of tax would allow them to collect the federal government's revenue and thereby get rid of their hated enemy, the IRS.

Holy Guilt by Association, Batman! The rest of the piece raises some reasonable questions about the numbers that Fair Tax advocates have been using and the problem with taxing some sales that aren't currently taxed (e.g., new home sales) and collecting sales taxes where there currently isn't a state sales tax (e.g. Delaware). I think, though, that he's off-base regarding the sales tax rebate included in the plan. Bartlett writes:

Since sales taxes are regressive--taking more in percentage terms from the incomes of the poor and middle class than the rich--some provision is needed to prevent a vast increase in taxation on the nonwealthy. The FairTax does this by sending monthly checks to every household based on income.

Aside from the incredible complexity and intrusiveness of tracking every American's monthly income--and creating a de facto national welfare program--the FairTax does not include the cost of this rebate in the tax rate. As noted earlier, the FairTax is designed only to match current revenues and does not cover any increased spending that it may require. Since the rebate will cost at least $600 billion the first year, either federal discretionary spending would have to be cut by 60% or the rate would have to be five percentage points higher than advertised.

It's my understanding that the rebate would be uniform and universal, effectively exempting the first X dollars of spending from this national sales tax. It still would require a federal taxing authority to determine who is entitled to the rebate, and I suppose it would vary by number of people in a household.

This seems a bit of a juvenile rhetorical overreach, too:

Perhaps the biggest deception in the FairTax, however, is its promise to relieve individuals from having to file income tax returns, keep extensive financial records and potentially suffer audits. Judging by the emphasis FairTax supporters place on the idea of making April 15 just another day, this seems to be a major selling point for their proposal.

Yet all but six states now have state income taxes. So unless one lives in one of those states, this promise is an empty one indeed. In short, the FairTax is too good to be true, and voters should not take seriously any candidate who supports it.

If the Fair Tax takes hold at the federal level, presumably voters will want to encourage it at the state level too.

I have my own doubts about the advantages of the Fair Tax -- there will still be wrangling about what is and isn't a taxable sale, what constitutes a valid business expense, and the distinction between wholesale and retail -- but I don't think Mr. Bartlett is being entirely fair.

The other rhetorical smackdown comes from Stephen Malanga in City Journal against opponents of public-private partnerships for the construction of roads and other infrastructure:

If the deals can overcome resistance from anti-privatization groups and from politicians who benefit from keeping a stranglehold on government assets, they could help make up for decades of underinvestment in infrastructure—and thereby renew America’s landscape....

The extraordinary breadth and scope of these deals places America on the verge of a financing revolution—that is, if it isn’t snuffed out by powerful politicians and anti-privatization advocates, who’re trying to turn a practical solution for governors and mayors into a partisan issue. There’s no reason that Democrats shouldn’t get behind privatization, as they did recently in big projects in Chicago and Virginia. Nevertheless, Democratic congressman Peter DeFazio of Oregon, head of the powerful House Subcommittee on Highways, Transit, and Pipelines, accused the Republican Daniels of selling the Indiana Toll Road to make “an ideological point” about downsizing government....

Malanga seems oblivious to the concerns about public-private partnerships coming from conservative Republicans over foreign control of public assets, public entities "leasing" their power of eminent domain to private companies, the lack of competitive bidding when selecting a private partner, and the bizarre non-compete clauses insisted upon by the private "partners."

These two articles seem to be more about marginalizing a threatening alternative perspective than engaging in dialogue with otherwise like-minded people who disagree on these issues.

MORE: In the comments, Tyson Wynn notes that Fair Tax advocate Neal Boortz rebutted Bartlett's column on his radio show earlier this week. You can read what he had to say in Boortz's "Nealz Nuze" archives for August 26 and August 27.

Ron Coleman writes of Bill Clinton's latest whopper:

I use Bill Clinton in my work all the time. My work as a lawyer is in the field of litigation, and I frequently have to help witnesses prepare for their depositions. As part of that preparation, I always tell them this, more or less verbatim:

Don't even try lying. Who was the best liar in our lifetimes -- the world champ? Right, Bill Clinton. He was the greatest. And what happened to him? He got caught, hung up. Almost no one is a good enough liar to keep it going, so if your conscience doesn't prevent you from lying under oath, at least learn the lesson of Bill Clinton. Just tell the truth.

As the saying goes: "It may be that your sole purpose in life is to serve as a warning to others."

In the U. S. House, fifty amendments have been offered to strip earmarks from appropriations bills. Club for Growth used votes on those amendments to compile a "RePORK Card" for House members.

None of Oklahoma's delegation was 100%, but District 1 Rep. John Sullivan came closest with 94%. Mary Fallin scored a 26%. The rest of the delegation was in single digits: Cole (8%), Lucas (6%), Boren (2%). The median score for all congressmen: 2%. Only 43 members scored 90% or better.

Presidential candidate Ron Paul, His Libertarian Majesty? Only 29%.

Only one pork-butchering amendment passed:

House Vote 593 - Bars funding of $129,000 for the Mitchell County Development Foundation for the home of the "perfect Christmas tree" project. Amendment passed, 249-174.

Some that sailed through:

• $1 million to the Center for Instrumented Critical Infrastructure in Johnstown, Pennsylvania, requested by Rep. John Murtha (D-PA). No congressional member could confirm the existence of the alleged Center. Amendment failed, 98-326.
• $2 million to establish the "Rangel Center for Public Service" at City College of New York, requested by none other then Rep. Charlie Rangel (D-NY). Amendment failed, 108-316.
• $34 million for the Alaska Native Education Equity program, requested by Rep. Don Young (R-AK). When Scott Garrett challenged Young's earmark, Rep. Young declared, "You want my money, my money!" Amendment failed, 74-352.

Nice: "My money! My money!" I guess being the target of a Federal corruption investigation has a way of setting your nerves on edge.

Republican Party officials at the national and state level ought to be praising the fact that 119 of the top 120 were GOP members -- Cooper (D-Tenn.) scored a 98% -- but condemning the fact that so many Republicans have been captured by the appropriations culture. The NRCC ought to be ought recruiting replacements for every one of the 24 Republicans who couldn't bear to vote against a single piece of pork.