My Representative Responds

Color me impressed, but today I received an email, a response, from my Representative in Congress, one Robert Wexler (D).  I truly did not expect to hear back from the guy (or, more realistically, his office).  I wrote to him about a week ago and I asked him, quite simply, why he didn’t support HR25, the FairTax Act.  I wanted an opinion from one of the honchos rolling around as to why you wouldn’t be in favor of such a seemingly amazing tax reform bill.  I expect that Representatives should be pretty up-to-date on issues and that they do no small amount of research when their constituency perks up their ears and says “WTF?”  In this case I’m not disappointed.  Here’s Rep. Wexler’s response to my query:

160px-RobertWexlerPhoto.jpgDear Mr. Sierra:

Thank you for taking the time to write regarding the Fair Tax Act of 2007 (H.R. 25). 
If passed, H.R. 25 would replace the income tax with a national sales tax. 
I appreciate your request for my opinion on this issue and I welcome the opportunity to respond. 


Although the revision and simplification of our convoluted
Federal tax code merits important consideration, our national economy
would likely be more volatile if it were to become more dependent on
consumer spending habits of non-necessities. 
A less stable economy breeds a larger unwillingness for individuals to
invest in the stock market, thereby leading to less capital available
for businesses to grow. 
In addition, a significant increase in sales taxes would likely cause
consumers to turn to underground markets for goods and deplete more
funds out of the economy.


We
must attempt to simplify the existing tax code, maintain a proper
balance of progressivity among taxpayers, and close loopholes that have
allowed some individuals and corporations to avoid their
responsibilities. 
Focusing on these goals will lead us to a truly fair tax system. This
bill was referred to the House Committee on Ways and Means on January
4, 2007, but has yet to reach the Full House for a vote.


Thank you again for taking the time to write. 
I sincerely appreciate your input and hope that you will feel free to contact me anytime I may be of assistance to you. 
In addition, I hope you find my website (http://wexler.house.gov) a valuable resource in keeping up with events in Washington and in South Florida.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 With warm regards,

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Robert Wexler
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Member of Congress

Very cool response, Rep. Wexler – just the kind of response I was looking for.  I wanted different perspectives, particularly educated perspectives, to work with.  Half the kooks out there are either rabidly in favor and simply quote the book like it’s some kind of tax-reform bible, and the other half are so ready to shoot down the idea they don’t care what kind of insane babble they spew.  Rep. Wexler’s perspective is appreciated, as it brings up something I hadn’t thought of:

our national economy
would likely be more volatile if it were to become more dependent on
consumer spending habits of non-necessities.

This seems like it would be true.  Seems logical, I suppose.  But isn’t the economy of the nation already tied into consumer spending habits?  Isn’t the stock market also tied into not only investor habits, but also consumer spending habits?  It’s an interesting point that I’m going to have to dedicate more brain cycles to, and I’ll open another research branch just for that.

A less stable economy breeds a larger unwillingness for individuals to
invest in the stock market, thereby leading to less capital available
for businesses to grow.
 

I can see this as well, if indeed the economy really were to become less stable. I might be wrong, but the stock market’s fluctuations and an investor’s willingness to purchase stock in a business is based on the success of that business, i.e. at the consumer level.  If a business isn’t doing well at a consumer level, then investors are less likely to invest, true.  Maybe this will lead to better products, as businesses attempt to keep consumers happy?  That’s a novel thought.

In addition, a significant increase in sales taxes would likely cause
consumers to turn to underground markets for goods and deplete more
funds out of the economy.


I’ve heard this one before, and I have to say that it’s not a particularly good point.  Considering the quality of the previous two points, I’m going to give Rep. Wexler a pass on this one.  According to the research I’ve done on HR25, there’s no significant increase in the cost of items, although there is an increase in sales tax.  Would underground markets exist?  Probably, just like they do now.  However, the majority of retail items aren’t purchased on the underground level, and wouldn’t be.  Plus, I think that any loss at this level would be more than offset by the increase in government funds brought about by the additional ‘taxpayers’ that would now be paying taxes every time they purchase something, instead of dodging the income tax (i.e. that same underground market.)  In other words, all the lost revenue from the current tax system would be recovered, and a percentage of that would be lost by this potential underground market.  It actually doesn’t sound like a bad deal for the government (except, of course, that politicians would have to pay taxes!)

I appreciate Rep. Wexler’s response very much, and to him I say “Thank you.”  He may not support HR25, but I think he has some valid points that will require some research to properly assess.  Once I’ve given them their due diligence, I’ll post up another response, one that more accurately assesses Rep. Wexler’s position and (perhaps) may change his perspective.

The Fairtax gets some opposition

Now that the Fairtax Act is getting national exposure (and apparently it’s getting quite a lot of it), there’s plenty of opposition cropping up.  Seems like the majority of the opposition is coming from the political class, the same people who stand to ‘lose’ the most when they suddenly have to start paying taxes again.  Nice.  Anyway, here’s a nice rebuttal (that includes the original article – nice one, guys) from the Fairtax organization to the most recent attacks.  Very interesting reading, and it’s a good primer to the Fairtax Act for those that aren’t familiar with it.

This FairTax thing everyone’s talking about

So a while back I was reading Wired magazine (the best magazine ever, by the way…) and I read about this book that promised to show me a way to abolish the IRS and reform tax law forever.  Feeling how I do about the IRS (that is to say, rather negatively at the best of times) and pretty much over the fact that the government really does just sit around with one hand in our pocket and one hand in theirs, I decided to look into it. 

FairTax Book

The book is called “The FairTax Book” and it’s written by some talk-show host I’ve never heard of and an equally obscure Senator. Thing is, they make sense.  You go through the book in a matter of hours (it’s a quick read and its written very well), they show you examples and issues, and you walk away feeling a couple of things.  First and foremost you feel “Wow, though, what a great plan.”  And it’s true.  It’s a great plan, theoretically.  It’s all very neatly proposed and seems to cover all the bases, all the arguments I could think of. 

The second thing you feel (and it’s unfortunate) is “this will never happen.  Congress will never, ever, in a million years
let this through.”  That kind of depresses me.  If the government
doesn’t want something, regardless of whether the people do, then it
just won’t happen.  Hmph.  The government is so convinced that they know what’s best for us that they treat us like children.  The terrible part is that it seems that we’ve bought into that and just sit back and ‘let the politicians politick.”  To me, that’s on par with voting for a politician simply because that’s the party you’re registered to.  Political decisions based purely on something so irrelevant as political party make me ill.

FairTax LogoThe democrats hate the FairTax act.  It takes away the government’s power to take away our earnings, which (potentially) threatens the resources available for all the social programs democrats love to dump money into.  I’m not saying it’s a bad thing, but I believe our government is so negligent and mis-manages resources so badly that any reform would be a positive step.  Republicans don’t seem all that pleased with it, probably for the same reasons.  One thing I found amusing – politicians don’t pay income tax.  To me, any resistance to this act smells of greed – greed to keep a hold on that nice 30% of their income that we pay, yet they get to keep.  That’s a big sweeping generalization, of course.  I’m sure there’s plenty of legitimate reasons to resist tax reform.  I just can’t think of any.  And the ones I’ve read about have traipsed all over the spectrum from ridiculous to well-thought-out, but misinformed. 

There’s a lot of misinformation rolling around.  One of the biggest is the whole 23%/30% tax proposal.  Opponents to the FairTax love to say “They’re trying to sneak a 30% sales tax on you.”  There’s simply no shortage of explanations why that doesn’t make any sense.  Here’s a really good one from their home page.

A few sites that I’ve found interesting and that may provide information for the interested (and/or merely curious) are: FairTax.org, Citizens for Alternative Tax Plans, and the FairTax Scorecard .  There’s no shortage of websites dedicated to being negative about the FairTax – here’s an example.  By all means read the information – but so much of it is uninformed and fabricated information that it just doesn’t make sense.  It reads like crazy survivalist propaganda.

It’s really just a big propaganda battle.  What can we do?  Honestly, read the book.  There’s lots of interesting ideas, even if you’re not into the FairTax act as a whole.  It’ll open your eyes to a lot of facts about the government that I guarantee you didn’t know.