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SLAMMING THE FAIRTAX

Well ... we have 24 hours under our belts now with The FairTax Book. It was gratifying to walk down the streets of NYC yesterday and see the book in the windows of bookstores. That's something I certainly didn't experience with "The Terrible Truth About Liberals."

If you visit Amazon.com you will also see several reviews ... mostly quite favorable. There's one review, however, that really perplexes me. The review is from Hayden Kepner ... uses the nickname "georgialib" for his reviews on Amazon.com. Somehow I don't think this is an abbreviation for "Georgia Libertarian." The truth here is that Kepner, being from Georgia, probably doesn't like me all that much ... and couldn't wait to trash the book when it came out. OK, that's fine. My question is .... Why did Hayden Kepner have to lie about the contents of the book in order to criticize it?

Since Kepner was so critical of The FairTax Book, I thought it would be best to just post his entire review here and respond point by point. My responses are in blue.

So ... here we go with Hayden Kepner's critique of The FairTax Book:

The so-called FairTax is such a simplistic, nonsensical idea that it's hard to know where to start in criticizing it, but here goes:

1. The 23% Rate is a Lie. The book claims that the FairTax rate would be as low as 23% (on all goods a services, including new homes, cars medical treatments, insurance, rent, food, basically everything you spend money on to survive). But look at Boortz's own examples. An item that costs $100 pre-tax would cost $130 with the tax. That's a 30% tax rate any way you slice it (in addition to state sales taxes, which would boost the rate even higher). When they lie about the rate, how can you trust them with anything else? Also, the true tax rate would have to be to around 50%-60% in order to collect as much tax revenue as our current system does. Don't take my word for it, though, look at an objective source on this subject, such as the Brookings Institution webite.

Well, I co-authored the book, and for the life of me I can't find anywhere in the book where we say that an item that costs $100 before the tax would cost $130 after the tax. It's simply not there .. not anywhere. In fact, due to price reductions brought about by the elimination of embedded taxes in all consumer goods, the price after the FairTax would be pretty much the same as the price under the current tax system. What's the problem here? Why did Mr. Kepner find it necessary to lie about what is written in the book in order to critique it? He says "look at Boortz's own examples:" Well, go ahead and look You won't find that example in the book! Amazing, isn't it? Kepner says "When they lie about the rate, how can you trust them with anything else?" My question is when Kepner lies about what's in the book, how can you trust him with anything else?

Kepner also refers to a Brookings Institution article which says that the tax would have to be 50 to 60%. Sorry, but that's not the FairTax plan. Brookings is talking about making many consumer items exempt from the tax ... food, clothing, medicines. Brookings changes the provisions of the FairTax in other ways to arrive at that higher tax figure. That's what the prebate is for. Again, Mr. Kepner tries to mislead. Did he do so out of ignorance, or malice? Wonder why?

2. Tax avoidance would skyrocket. Boortz claims the FairTax would eliminate tax avoidance. Wrong! Here's a simple example. Let's say I'm Neil Boortz and I want to buy a $200,000 yacht. Under the FairTax plan, I'd need to pay at least $60,000 in taxes to buy that yacht if I purchase it in the US. But if I go to the Bahamas and buy it, I don't pay any tax. Let's see, do I be a good citizen and pay the $60,000, or do I vacation to the Bahamas, buy the yacht there and pocket the $60,000? Gee, tough decision, but I know what ol' Neil would do. Same thing with expensive jewelery, vacations (why ski in Colorado and pay taxes on lift tickets, hotel and restaurants when you can ski tax free in Canada), you name it.

Once again ... either an intentional lie or honest misrepresentation. Nowhere in The FairTax Book do we say that "the FairTax would eliminate tax avoidance." In fact, we say just the opposite. We note that some degree of avoidance is a certainty ... just as it is under out present system. What was it that Kepner said? Oh ... I think it was something like "When they lie about the rate, how can you trust them with anything else?" Well .. here's another Kepner lie. What does that say about the rest of his critique? Now ... about that $200,000 yacht. First problem. $200,000 doesn't buy much more than a mid-sized Boston Whaler fishing boat. Pricing aside, If I were to go to the Bahamas and buy that yacht, as soon as I bring it into this country I pay the tax. Ditto for trying to buy an airplane in Switzerland, a car in Germany, Diamonds in South Africa ... whatever. I guess Mr. Kepner hasn't heard of the U.S. Customs Service. Not surprised. Also .. since when is Canada tax free?

3. It would destroy our economy. Remember, under Boortz's plan, virtually all purchases of new items by individuals would be subject to the FairTax. So when you go to buy a brand new house for $300,000, you now need to pay at least $90,000 in taxes. Are you going to buy a new house and fork over $90,000 in taxes, or are you going to buy a used home and not pay any taxes? Easy choice. Good-bye, construction jobs. Same with new cars and consumer goods. Nobody will buy new. Good-bye, Detroit. Good-bye, Wal-Mart (which might be a good thing).

OK ... now we know that Kepner hasn't read the book and hasn't read H.R. 25, the FairTax Act. The FairTax is inclusive in the price of a consumer item. When you buy a $300,000 home ... the price is $300,000. No tax is added. The tax is inclusive in the price. Further, a $300,000 home before the FairTax will cost approximately the same after the FairTax. Why? Because the embedded taxes incurred in the construction of that home ... taxes that will be removed from the pricing ... will be gone. Poor Heyden Kepner. That's strike three.

4. More tax avoidance. Remember, businesses aren't subject to the FairTax for their "investments". So I set up an LLC, buy a vacation home, and rent it out a couple nights a year. Bingo! It's now an "investment". No tax. Hey, why don't I do the same thing with my primary residence? After all, there won't be any IRS looking over my shoulder, will there Neil? In fact, maybe everything I buy from now on (clothes, restaurant meals, cars) will be for my LLC. Hey, good thing there won't be any IRS around to make sure these aren't for personal use.

That's called tax avoidance, Hayden. It's illegal now .. it will be illegal then. That same tax avoidance scheme is available to you right now. Why don't you get out there and try it? Let us know how it works out. It seems that Hayden Kepner's critique gets weaker as we go along.

5. Even more tax avoidance. Is a drug dealer going to pay taxes on the drugs he sells? What about deli's or retaurants that operate a cash business. Are they suddenly going to report all of their sales and pay taxes on them? Uh, let me guess.

These delis (there's no apostrophe, Hayden) and restaurants (that's the proper spelling) can do that now. Do they? Yes ... some do. Most don't. Again, there will be enforcement of the rules and regulations of the FairTax. Running out of steam, aren't you Mr. Kepner?

6. Fairness. I got news for you, Boortz. Poor and middle class people spend a much higher percentage of their income than do the rich. They need to, just to get by. The rich, on the other hand, have plenty of money left over to save and invest. So, by definition, the FairTax would fall disproportionaly harder on the poor and middle class. Maybe Marie Antoinette would think that's fair, but most American's don't. 'Nuff said about that.

The president's tax reform commission scored all of the proposals for tax reform, including the FairTax. The commission reported that the FairTax was the only tax reform proposal out there that completely relieves the poor of the burden of paying federal taxes. The only one. How many strikes does that make it now for Kepner? Not a very good at bat.

7. One good thing: No corporate tax. The only redeeming value of the FairTax system would be the elimination of corporate income tax. That in itself would make our corporations more competitive by eliminating the incredible expenses they incur in accounting costs as well as in paying the corporate income tax itself (the dreaded "imbedded taxes" as the book calls them). But we could accomplish the same thing under our current system by simply abolishing the corporate income tax today and taxing dividends and capital gains at the same rate we tax ordinary income (i.e., wages). After all, if the corporate income tax is eliminated, corporations' share prices will go up and/or they will pay out more in dividends. So what do we need a corporate income tax for? But we don't need to throw out the personal income tax just to eliminate the corporate tax.

Mr. Kepner doesn't recognize that all corporate taxes are paid by individuals anyway ... consumers, employees or shareholders. But then by now we understand that he hasn't read the book; so, no surprise here either.

Come on, Congress! Give us a simple, mildly progressive income tax that applies to all forms of income, without all the complicated deductions and exemptions, then all of our tax rates would be lower and ridiculous ideas such as the FairTax wouldn't have any appeal whatsoever. But with the current group of folks running Congress, I won't hold my breath waiting for anything rational to make its way into law anytime soon.

OK. Enough for one post. But you get the idea. THIS IS A STUPID PROPOSAL AND ANYONE WITH AN OUNCE OF SENSE KNOWS IT.

We'll let the readers decide, Mr. Kepner ... and that's a group that doesn't include yourself.

Latest teacher in the news for having sex with male students. I wonder if there's something in blonde hair dye that's causing all this?

CALLS FOR PROFILING

It looks like people in this country are finally starting to get the message. Earlier this week in Great Britain, the London police made a little news when they announced they weren't going to waste their time searching little white old ladies. London remains on high alert...constantly searching and looking for the next suicide bomber and the most effective ways to stop said bombers.

With probably millions of people riding the subway system, how does law enforcement keep an eye on things? Do you go the route of the TSA and search every certain number of persons, no matter who they are? Not if you want to actually prevent a bombing. So while the United States is strip searching the librarian, the Brits are looking for people who look like terrorists. Islamic terrorists. Outright racial profiling. Something we would never do.

Or maybe we would. Finally there seems to be a bit of backbone coming from politicians on both sides of the aisle. And it comes to us from New York, a city with a bit of experience with terrorism. Over the weekend, Democratic State Assemblyman Dov Hikind finally came right out and said that the police were wasting time with random searches of subway patrons. Said Hikind: "They all look a certain way. It's all very nice to be politically correct here, but we're talking about terrorism." Right. The only way to ensure the continued survival of the American way of life is to start singling people out, and right away.

As you might expect, the good assemblyman's comments caused quite a stir. Yesterday, jumping to his defense was Republican City Councilman James Oddo. Oddo had this to say: "The reality is that there is a group of people who want to kill us and destroy our way of life. Young Arab fundamentalists are the individuals undertaking these acts of terror, and we should keep those facts prominently in our minds and eyes as we attempt to secure our populace."

Will we do what is necessary to stop suicide bombers before they start striking here? If we follow the advice of these two New Yorkers, our chances are good. If we listen to everybody else, the chances are not too good.

Political correctness used to be just an annoyance. Now it has deadly consequences.

ROBERTS IS RICH!

Federal Judge and nominee to the Supreme Court John Roberts has to make all sorts of disclosures to the Senate Judiciary Committee as part of the confirmation process. One of those is financial disclosure, meaning how much he's worth, where the money is and so on.

Turns out Roberts is doing pretty well, with some $5.3 million in assets. Not bad for someone who is about to take a drastic pay cut to go back into government work. But the media is focusing on that $5.3 million figure...imagine that, a rich guy on the Supreme Court! And so it goes with the class warfare card.

With Roberts' wealth making news, perhaps it's worth noting the net worth of some of the politicians in the United States Senate. Out of 100 members, 40 are millionaires, including:

The Poodle: net worth...between $164 million and $211 million, thanks to the wealth of his Keeper
New Jersey Senator John Corzine...$71 million

And the list goes on and on. It doesn't really matter, but with the media making as big a deal as possible about Roberts' financial disclosures this week, perhaps it's worth nothing that compared to some of the U.S. Senators that will be quizzing him, he's dirt poor.

DEMOCRATIC DESPERATION

President Bush just had his latest physical examination. According to press accounts, Bush is in top shape...quite the athlete. He rides his bike regularly, exercises all the time and is in very good health. Presidents through the years have these examinations to prove their fitness for the office in which they hold. Fairly routine.

But what wasn't routine was the cheap shot the Democratic National Committee took once the report on his health was made public. To outline the absolute desperation of the Democrats these days, take a quick peek at one of the lines from their press release:

"While President Bush has made physical fitness a personal priority, his cuts to education funding have forced schools to roll back physical education classes and his Administration's efforts to undermine Title IX sports programs have threatened thousands of women's college sports programs."

Leave it to the Democratic Party to take something like physical fitness and try and turn it into a political attack. Shameless, but not unexpected. With Howard Dean running the show, should we be surprised?

The idiocy continued...this time a quote from a DNC spokesperson: "His personal habits indicate that physical fitness is not just fun and games for him. Don't our kids deserve the same opportunities to be physically fit? President Bush should stop running from his responsibility and make sure that all American children have access to physical fitness programs."

Since when is physical fitness the responsibility of the federal government? Doesn't show up in my copy of the United States Constitution. Boy, times sure must be lean down at DNC headquarters if this is the best they can do.

ATLANTA AREA FAIR TAX RALLY THIS FRIDAY

Atlanta and Georgia listeners! We want you at the "Fair Tax Rally" and Pre-Rally Luncheon this Friday at the Cobb County Civic Center in Marietta, Georgia. Here's the schedule:

Friday, August 5

11:30am-1pm Luncheon and Neal Boortz Show broadcast. You must purchase a ticket for this event. You get to watch the Boortz Radio Show, you get fed, and you get a signed copy of "The Fair Tax" book. The National Retail Sales Tax Alliance is running this. Call today to purchase tickets at 770/448-6311, and hit Extension 100.

1:15pm "Fair Tax Rally" and book-signing. Doors open to the public at 1:00pm.

Neal Boortz, Congressman John Linder, and more. This 1:00 event is free and open to everyone.

Chapter 11 will be there with copies of the "Fair Tax Book" for sale.

REDNECK SCRAP BOOK

Aww, what a cute and cuddly little doll. Every little girl should spend her formative years cuddling up to a beer can. More in the Redneck Scrap Book.

READING ASSIGNMENTS

Journalist Steven Vincent, a freelance journalist, was tragically and brutally murdered in Iraq yesterday.  Here is his last report he filed.

Did you know that the former chairman of Air America was allegedly siphoning money off of a charity for children to give money to the liberal talk radio network?  Michelle Malkin wonders where the media is on this.

The media is upset because Bush is visiting his ranch again, this time for a record five weeks.  Of course, they're too stupid to realize that the president of the United States is never on vacation. Ever.

The Washington Post continues their Army-bashing, this time on page 1. Their

focus? A single death of an Iraqi in American custody.  Oh, and they had to throw in Abu Ghraib.  It's their addiction.

Kofi Annan and John Bolton met and exchanged pleasantries yesterday.  Still might be a good idea for Kofi to move out of the top 10 floors, though.

When are they going to learn that the Bush-bashing doesn't work at the polls?  The Republican Party held on to a seat in Ohio, defeating a Democrat who was critical of Bush, 52% to 48.

Joseph Wilson lied about his trip to Africa and brought on the increased scrutiny of his wife that was the result of his piece in the New York Times.  Cliff Kincaid takes a look inside Wilson's lies.

The recently departed King Fahd of Saudi Arabia both sided with the United States in the War on Terror and the terrorists themselves.  Frank Gaffney explains how the Saudis played both sides of the fence.

The media was none too pleased at George Bush's recess appointment of John Bolton, and they let everyone know about it.  The Media Research Center reports.

The Kelo Supreme Court decision continues to make some noise.  This time, Walter E. Williams looks at the accusation by those on the left that it was conservatives making a big deal out of property rights.

Did you know that PBS viewers are 44% more likely to make more than $150,000 than other television viewers?  John Stossel calls the continued public funding of PBS welfare for the rich.

WHAT THE HECK ARE THOSE POINTY HAND THINGS?

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