FAIRTAX, FLAWED TAX?

This is what The Wall Street Journal had to say about the FairTax. And boy did they get it very, very wrong.

Evidently the FairTax is making some people nervous. The attacks are increasing, and there's a striking similarity in the fabrications being offered by columnists and pundits from coast to coast.

The heaviest, and possibly the strangest, attack over the weekend came from Wall Street Journal columnist Bruce Bartlett. Bartlett's column was titled "Fair Tax, Flawed Tax," and by Sunday morning it had generated hundreds of emails. When I finally read Bartlett's column I was completely stunned. I've referred to his commentary dozens of times in the last few years on the show, so for him to be so far off - so bizarrely wrong - about the FairTax was stunning.

OK ... by now you've probably read the column, so let's deal first with what I feel to be Bartlett's libelous assertion that the FairTax was " ...originally devised by the Church of Scientology in the early 1990s as a way to get rid of the Internal Revenue Service,"

Where in the hell did that come from?

This assertion - that the FairTax was developed by the Church of Scientology - is flat-out false. I suspect that Bartlett allowed someone else to do his research for him on this issue; someone with an agenda. Perhaps he blindly accepted some information from a Washington insider, perhaps a K Street denizen who fears the loss of power and income should the FairTax become law.

What Bartlett did was very simple, and astonishingly careless. He mistook a group called Citizens for an Alternative Tax System (CATS) for the people who developed the FairTax.

Now CATS did have a plan for a national retail sales tax, but it was in no way connected with Americans for Fair Taxation (AFFT) and the FairTax. I was familiar with the CATS program. I had them on my radio repeatedly. As I've told you, I've been interested in this idea of replacing the income tax with the sales tax for some time.

The CATS idea was simply to do away with income taxes and replace them with a 17% sales tax. Payroll taxes would stay with you, as would many other federal tax levies. As you can see, this is substantially different from the program offered by the FairTax.

I'm going to lead you to several articles here. The first link will take you a document detailing the history of CATS. If you read this carefully you will see absolutely no reference to the FairTax. There is no reference to Congressman John Linder or H.R. 25, the FairTax Act. All of the references are to CATS and their own idea of a national retail sales tax.

Moving right along here, next you have a list of articles detailing the connection between CATS and Scientology. That's right. It was CATS, not Americans for Fair Taxation with the strong connection to Scientology. In fact, here's another link setting for Scientology front groups. Scroll down the list a bit and you'll see CATS! You will not see AFFT or the FairTax mentioned.

The people responsible for creating AFFT and the Fair Tax are Houston Businessmen Leo Linbek and Robert McNair. Neither one of these people are Scientologists. These men and their associates raised over $20 million for a study on finding an alternative to the federal income tax. That research was conducted by a coalition of market and academic experts from places such as MIT and Harvard, none of whom were associated in any way with Scientology. From that research came the FairTax.

Just an interesting historical note: When the research for a new tax system was commissioned with the $20 million raised by Linbeck, McNair and their associates, they made a commitment to accept whatever findings the research developed, strongly suspecting that their efforts were going to lead to the endorsement of some sort of a flat tax. The market and academic researchers came forth with an idea for a national retail sales tax instead, and the FairTax was born.

Bruce Bartlett owes Leo Linbeck, Robert McNair and the hundreds of thousands of FairTax volunteers across an America an apology. I suspect that apology will be forthcoming before too many days pass.

There were many other inaccuracies in Bartlett's column. As you know Congressman Linder and I, with the help of a brilliant analyst named Rob Woodall, are busy writing another FairTax book that will address virtually every meaningful criticism you may have heard or read. In Reader's Digest form, here are some quick response to other charges by Bartlett:

Bartlett jumps right into the middle of this nonsense over what the real tax rate is; 23 percent or 30 percent. He correctly points out that we don't quote the FairTax rate the way conventional sales taxes are quoted. The reason is simple; the FairTax will replace the embedded taxes and already exist in every item or service we purchase; and secondly, the FairTax will replace the income tax. Both the embedded taxes in the prices of what we buy now and the income taxes we pay now are inclusive taxes. We're replacing inclusive taxes with inclusive taxes.

It's so very simple: When you see a lamp on the shelf marked $100, you will pay $100 for that lamp when you get to the checkout. You will receive a receipt which shows that $23 of the $100 you have paid represents the FairTax. You do the math for yourself, but every time I work it out it comes to 23%

Bartlett also joins other critics in another blatant falsehood about the FairTax. Here's a sentence from his column: "If a product costs $1 at retail, the FairTax adds 30%, for a total of $1.30. Since the 30-cent tax is 23% of $1.30, FairTax supporters say the rate is 23% rather than 30%." In another paragraph Bartlett also says "Imagine paying 30 percent to the federal government on top of the purchase price of your next house."

Wrong, wrong, wrong. If a product costs $1 at retail .... It costs $1, with the FairTax already included. This is so easy to understand, you almost get the idea that people are intentionally trying to confuse the facts here. That $1 item Bartlett is referring to costs $1 at retail today! But instead of including the FairTax in that price, all of the embedded taxes from every business and individual involved in bringing that item to the marketplace are included. You remove one, you add the other. And that bit about 30 percent to the federal government on top of the purchase price of your new home? Another lie. The embedded taxes are so high on the price of a new home today that when they are removed and the FairTax added, that home could be a percent or two cheaper! Come on, Bruce. This really isn't that hard. Let's try to spell this out plainly for everyone:

In another astonishing falsehood Bartlett says that the cost of providing the prebate to every household in America is not factored into the FairTax rate. He says it would cost at least $600 billion the first year. Again, Bartlett is just flat wrong. The cost of the rebate most certainly was included in the 23 percent rate. Congressman Linder tells me that if the rebate had not been included the FairTax rate could have been lowered to 18 percent. The fact is that the rebate is projected to cost 5 percent, and that 5 percent is most certainly included in the rate.

Bartlett makes another huge mistake(?) regarding the prebate. He says that the FairTax sends monthly checks to every household based on income. Then he speaks of the "complexity and intrusiveness of tracking every American's monthly income .." Wrong ... completely and absolutely wrong. As anyone who has read the book knows, the prebate is not based on income, it's based on family size. There is no need to track anyone's monthly income. The only thing the government needs is a valid Social Security number and the number of people in the household.

Then, of course, Bartlett gets into the question of whether or not you can fund the federal government at present levels with a 23 percent inclusive sales tax rate. He cites numerous sources that say the tax rate would have to be much higher than 23 percent.

Know this ... in every case where some individual or organization has come forward to say that the tax rate would have to be higher than 23 percent, they have first changed the terms of the FairTax. That is, they have created exemptions. For instance, they assume that congress would never agree to tax food and medicines, therefore the tax would have to be XX percent, or that congress wouldn't tax transportation and housing, therefore the tax would have to be XX percent. Again .. the fact that the taxes are already there in the form of embedded taxes - embedded taxes to be replaced by the fair tax - is ignore.

Instead of me arguing about the sufficiency of the 23 percent rate, perhaps you would like to read it for yourself. Here's a link to a study by several economists titled "Taxing Sales under the FairTax: What Rate Works?" Don't take my word for it. I'm just a second-tier talk show host. See what several renowned economists have to say in a 34-page report.

Let's face it. The FairTax is a ripe target. It is easy to demagogue.

• "Candidate Smith wants to add 30 percent to the price of everything you buy."
• "Candidate Jones wants to add 23 percent to the price of your new home"

Can you imagine some uninformed voter (remember, most voters are government educated) hearing something like that? You just know how they're going to vote, don't you?

Is it possible that some of these irresponsible attacks are being mounted right now to prevent a new candidate, Fred Thompson, for instance, from running on this issue? Is a shot being fired across some political bows?

VICK SUSPENDED

The NFL suspended Michael Vick indefinitely. This came only after he pleaded guilty to federal dogfighting charges in Virginia on Friday.

The Falcons no longer have to pay him his salary, estimated at around $8 million a year. Although he's already received $40 million in guaranteed bonuses, under the union's collective bargaining agreement the Falcons now are free to attempt to recoup a portion of those bonuses - $22 million.

Go for it! If the Falcons get the money back, it will go toward the salary cap for the upcoming season. That would give them a good bit of extra money to find someone to replace Vick.

What a train wreck. This is the result of living the coddled life of an athlete through your formative years. You think you can do anything you wish, lie to anyone you want, and there will always be people around to cover for you because you're a talented jock.

Sad ... but maybe some people will learn something from this.

HARSH WORDS FROM IRAQ

And they were directed at Democrats, Democrats like Hillary Clinton and Senator Carl Levin (D - Michigan) who have both called for Iraqi leader al-Maliki to be replaced.

Al-Maliki had this to say to those who are calling for his resignation, "There are American officials who consider Iraq as if it were one of their villages, for example Hillary Clinton and Carl Levin. They should come to their senses."

But even Bush and ambassador Crocker have said that they are "frustrated" or "disappointed" with al-Maliki. They, however, have not proclaimed that he needs to be replaced.

Just last night top Shiite, Sunni Arab and Kurdish leaders in Iraq announced that they have reached a consensus on key laws. These are seen as key to national reconciliation. Al-Maliki appeared on Iraqi TV with other leaders, showing public unity.

The leaders say they have signed agreements on easing restrictions of former members of Saddam's party. A consensus has also been reached on provincial elections and the release of detainees who have yet to be charged. They also endorsed a draft oil law, which will eventually go to parliament.

If al-Maliki doesn't get his act together ... if some sort of spirit of cooperation doesn't begin to emerge ... more and more Americans are going to wonder why we continue to make sacrifices; and they'll have a point.

DRIVE A TRUCK ... YOU MUST SPEAK ENGLISH

Commercial truck drivers coming from Mexico were shocked when they received a ticket from U.S. inspectors ... because they couldn't speak English.

This has been a law for years - requiring that Mexican drivers coming to the US speak English. Mexican truck drivers could get away with Spanish in commercial border zones, but a new provision will let over 100 Mexican companies go beyond these border zones. And now people are more concerned about the drivers being able to speak English. They consider the Mexican trucks to be unsafe and "unnecessary risks" on U.S. highways.

One transportation company owner, Tamez Trevino, is worried that his drivers will be unable and unwilling to learn English.

Other activists call the law "unfair."

There is no "press 2 for Spanish" when you're barreling down the highway at 70 miles per hour and a sign warning of a danger ahead flashes by. Learn the language or go back to driving goat carts in Chihuahua.

FLORIDA LOSES DEMOCRAT VOTES

Florida decided to change its primary date to January 29th. Democrat Party rules say that the states can't hold their primaries before February 5th, except for Iowa, Nevada, New Hampshire and South Carolina. This was designed to "preserve the traditional roles" of selecting nominees.

On Saturday, Democrats decided to strip Florida of all of its presidential convention delegates unless it changed its date. This means that the fourth largest state (210 delegates) would not have votes for the 2008 nominating convention in Denver next summer.

The state party has been given 30 days to comply by moving the primary after February 5th.

Florida's congressional delegation says that this may be cause for a voting rights investigation.

What fun. While they're at it, perhaps they can strip some votes from all states with a large military presence. That's what the Democrat Party tried to do in Florida in 2000!

IRAN VOWS TO USE 'SMART BOMBS'

On Sunday, Iran vowed to use new 2,000-pound "smart bombs" against enemies. It also unveiled a mass production of the new weapons. Iran's defense minister says, "We will use this weapon where we want to ... hit enemy's strategic and defense targets ... This will be used against our enemies, against those who violate our land and air space."

Needless to say, Israel is a little concerned. How much longer before we, or someone, steps forward to teach Iran a bit of a lesson in world power?

REDNECK SCRAP BOOK

In a car wreck? Duct tape to the rescue! More in the Redneck Scrap Book.

READING ASSIGNMENTS

A Miss Teen USA contestant's answer [video] to the question "why can't 20% of Americans locate the U.S. on a world map."  Hey, she still made 3rd runner up! Is anyone surprised that she went to a government high school? No, I didn't think you would be. Watch it! Royal calls it "the white man's Boo Got Shot."

Mike Huckabee says that obesity could be a serious problem for the U.S. economy and even our national security.

Republican Senator John Warner says that he may back Democratic plans for troop withdrawal, if Bush can't come up with a sufficient timeline for pulling out troops from Iraq.

Here's Mark Steyn on Bush's comments on Vietnam and how the media will do anything to make our fight against Islamic extremists a failure.

Here's some more follow up to the deportation of Elvira Arellano. Her son, a legal U.S. citizen, is now left in the United States. But this is the risk she knowingly took. After all ... she's an aaaaacitivist!

Looks like the data to support climate change cultists isn't really supporting the dire warnings of radical change. So sad.

Illegal aliens living in ... a cemetery? The mayor says you can't arrest the homeless illegals "because it's infringing on the rights of the illegal immigrants."

How about this government outrage ... where has all the federal Katrina relief money gone?

A city decides that it wants cheap labor to clean up litter. So it pays the county $25,000 to use its prisoners? Why can't they work for free?

Classes still haven't begun yet at the Khalil Gibran International Academy, the Muslim school in New York. However protests are already taking place.

Two people died in a hot air balloon accident this weekend in Canada.

The University of Vermont installed gender-neutral bathrooms, costing taxpayers $2,500 for each bathroom to be built.

Ft. Lauderdale beaches are eroding so quickly that officials are thinking of using crushed recycled glass to help fill the gaps. I thought they didn't allow glass on beaches.

The devil made him beat his wife? Oh give me a big time break, would you?

Voids surrounded by a sphincter muscle. Obviously, the devil made me do this!

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