We went a week without any public hearings on Internal Revenue Service missteps. Did you miss the brouhaha?
But we at least have a new television ad attacking the tax agency.
The Washington Post Politics blog says the commercial, which calls for the abolishment of the IRS, is airing nationwide and is aimed at Members of Congress.
The TV spot is from Americans for Fair Taxation, a group headed by wealthy Houstonian Leo Linbeck III.
Linbeck has been characterized by some as an electoral anarchist because of the campaigns supported by his super PAC, Campaign for Primary Accountability (CFPA).
The 30-second Fair Tax spot describes the IRS as "out of control" and denounces it for "playing politics."
Its call to "end the IRS" gives viewers a website and toll-free number to get more information and/or make a contribution to the cause.
What is the Fair Tax? The anti-IRS group wants Congress to enact the Fair Tax Act of 2013, introduced as H.R. 25 in the House and S. 122 in the Senate.
The bill would repeal the federal income tax, employment tax and estate and gift tax.
In place of the revenue lost from ending those taxes, the bill would impose a national sales tax on products and services. The tax would start at 23 percent in 2015 and be adjusted for inflation in subsequent years.
The bill would end funding for the IRS after fiscal year 2017. Think of it as a permanent furlough.
So how would the sales tax be collected?
States would have the primary authority for collecting the federal sales tax and sending the money to the U.S. Treasury.
On a symbolic level, the Internal Revenue Code of 1986 would be redesignated as the Internal Revenue Code of 2013.
And because we are talking taxes, the bill would provide some exemptions from the sales tax for property or services purchased for business, export or investment purposes, as well as for state government functions.
Also, lower income families would be eligible for a monthly sales tax rebate.
Finally, if the 16th Amendment to the constitution,the one that created the income tax, is not repealed within seven years after the Fair Tax Act is on the books, the newly created sales tax would end.
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David
They are quite misleading. I just read through their proposal. It’s a 30% tax rate that they’re talking about. They’re saying that if you tax $77 at 30%, you get tax of about $23. So, out of $100, $23 went to the government. In other words 23% of the $100, not 23% of the purchase price.
Then they start adding random tax rates together as some justification for the rate and say that it will be fair for the middle class and the lower income people to start shouldering a much higher percentage of the taxes. I think they’re trying to tie that together with the argument that prices are higher when there are corporate taxes paid. I’m not sure if the numbers would work out the way they theorize. Then they skip any mention of how they calculated that their proposal is revenue neutral, which I’m skeptical about.
Plus they seem really vague about how you aren’t taxed when you spend under the poverty level. I’m glad someone is trying to put together a way to reform, but I would like to see a lot more data and a lot less hand waving.
Peter Reilly
A 23% sales tax with a variety of exemptions and a rebate going to “low income” people. That should be a piece of cake. Won’t need anybody to enforce something like that.
Paul Williams
If the tax is a percentage, why would it need to be adjusted for inflation? Isn’t that automatically included? (As the price of products and services increases so would the total amount of revenue.) The only thing I could see an inflation adjustment applying to would be the income level for the monthly sales tax rebate.
I like the idea, but I found that aspect a little confusing.