Tuesday, March 16, 2010

Interview with Ken Hoagland, Author of "The FairTax Solution"

If you didn't get a chance to catch it live, visit this page to listen to my fantastic interview this last Saturday with FairTax advocate Ken Hoagland, author of The FairTax Solution. It's only a half hour long and he answered a lot of my concerns about the FairTax.

Though I feel a little better about it, I'm still skeptical of any new tax, and worried that despite his assurances to the contrary, which I'm sure are very sincere, that the welfare statists, warfare statists, and other tax-and-spend politicians will seize upon the opportunity to institute a national sales and then only a short period of time later, hit us with the income tax all over again- squeezing Americans between two major Federal taxes. Yikes!

But as I said in the interview, there are legitimate differences of opinion between those who want to limit the size, role, and influence of government. Ken fundamentally understands what's wrong with government and was really talking my language throughout the interview.

Check it out.

4 comments:

Dutchman3 said...

Wes,

OK, I listened to your interview with the "Texas Hoagie", and it was quite a Fairtax snow job by Ken. I hope you will do lots more homework before you get out on that Fairtax limb by yourself. Your skepticism is certainly warranted.

For openers, here are some things he didn't tell you, more or less in the order of the interview:

(1) Ken claimed that $10-15 trillion in private investment would flow back to the US, but he didn't mention that according to the Tax Justice Network, there is only $1.6 trillion in offshore accounts owned by North Americans. Nor did he mention that HR25 lays on a 23% tax on income generated within the US by foreign owned firms or foreign individuals. That isn't a very good incentive to rush back to our high labor cost environment.

(2) Ken made it clear that families at or below the poverty line income would pay no federal tax. But he didn't mention that that would mean that 30 million workers would pay no net federal tax annually, yet would still qualify for full Social Security pension and health care benefits. Is having 30 million workers disconnected from the cost of the federal government a good thing?

(3) He made the prebate sound just like a tax refund, which it isn't. The Fairtax prebate is actually a $600 billion cash grant entitlement, coming at a time when entitlements are squeezing out discretionary spending in the federal budget.

(4) Ken stressed that the reason everyone could be better off is that the Fairtax base is much broader than the income tax, but he didn't mention that 20% of the taxable base consists of government consumption. It would be unconstitutional for the federal government to tax State and Local operations under our federal form of government.

(5) In Ken's view, staring at a cash register receipt makes the Fairtax transparent. But he didn't explain that the retail merchant added 30% to his costs in order to get a 23% inclusive tax amount, and that 30% never appears on the receipt. And, federal taxation of State/Local government consumption hides 15% of the needed federal revenue in higher S/L taxes. Is that transparent?

(6) Ken likes to blame the lack of Fairtax interest over the last twelve years on lobbyists and the Congress. As a former Defense lobbyist, I can assure you that golf outings, dinners, gifts, etc. are against current House/Senate rules. Just ask Charlie Rangel!

Wes, there is lots more wrong with HR25 and the Fairtax scheme. If you are interested, I can send you my 15 count indictment of the Fairtax. Meanwhile, I'm curious why you are so nervous about having two or more tax collection systems. Why do you believe it is a good thing to "put all our eggs in one basket"? All fifty State Governors are opposed to any kind of a national sales tax, so trying to repeal the 16th Amendment would be difficult if not impossible. What is wrong with an income tax on incomes over $150,000 plus a small VAT, which is a form of consumption tax that is used by over 130 nations around the world?

Stay tuned!

Hank Van Gieson
LTC(RET)USAF
Ft Myers, Fl
vanlinda@comcast.net

W. E. Messamore said...

Excellent points, Hank. If you want to send me that 15 point critique, feel free to shoot me an e-mail, and if I like, I'd be glad to publish it in a post here with your permission.

Dutchman3 said...

Wes,

Will do, but I don't seem to find your email on the blog? Help!

Hank

W. E. Messamore said...

It's the blue button with the little envelop on it in the upper left corner on the sidebar. I guess this means I might need to make it more conspicuous.

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