From the July 2006 Idaho Observer:

Part 2: Fair warning on the "Fair Tax"

As you can see, the plan to abolish the income tax and the IRS has come quite a long way in Congress without the American people knowing much about it. The plan to dissolve the borders between Canada, the U.S. and Mexico to create a North American union with a common currency is also pretty far along, though Americans are generally clueless that their senators and reps have been contemplating such this radical (and controversial) reorganization of their country’s priorities as well.

by Vicky Davis

Every morning both the Senate and the House of Representatives begin their day by having a guest preacher give an opening prayer. After listening to the 2004 House Budget Committee hearing on tax reform, it seems that it would be more appropriate and more to the point if every day, the Senate and House began their day by reading the Preamble to the Constitution:

"We the people of the United States, in order to form a more perfect union, establish justice, insure domestic tranquility, provide for the common defense, promote the general welfare, and secure the blessings of liberty to ourselves and our posterity, do ordain and establish this Constitution for the United States of America."

The reason for the Budget Committee hearing was because the U.S. government tax revenues as of the end of fiscal year 2003 were at their lowest point since 1950. The revenues were only 16.2 percent of Gross Domestic Product (GDP). There had been 8 straight quarters of declining revenues since 2001 The budget deficit was $422 billion dollars - a $47 billion increase over the previous year. Other economic problems noted include:

Estimated $1 trillion untaxed economy in porn, drugs and illegal labor. Between $5 and 6 trillion dollars of capital and productive capacity moved offshore to foreign countries. To avoid taxation, corporations refuse to repatriate their profits and the vast majority of them have incorporated offshore so they aren’t even American corporations anymore - they just pretend they are. Products exported include corporate taxes paid, imports are untaxed (and are produced by primarily and effectively slave labor in third world countries).

20 percent of the people, pay 80 percent of the taxes

Clearly, all the incentives are for corporations to move offshore and continue to import their goods and services here. It is also beneficial for the wealthy to give up their citizenship because they can still live and do business here without paying taxes.

The WTO and ‘free trade’ agreements were mentioned only by indirect reference in terms of what tax reforms would be legal under the rules of the GATT-GATS agreements. No mention was made of the tax incentives (subsidies and tax breaks) that are given to corporations for moving offshore and no mention was made of the financial assistance that is available for corporations to move offshore (i.e. Export-Import bank, Overseas Private Investment Corporation, World Bank, etc.) And there was no discussion of how these trade agreements are obviously detrimental to the U.S. economy. There was one brief mention by Congressman Spratt that they didn’t want to ‘touch off a trade war’.

Summary of the Problem

The problem can be summed up by saying that the U.S. has severe structural economic problems due to globalization which is the free movement of capital, goods and labor without regard to national borders or laws. The Congress has taken off the table - the option to leave the WTO and cancel all ‘free trade’ agreements even though clearly, they are gutting the U.S. economy of productive capacity and they are bankrupting our country. The tax reform proposals - regardless of which plan - are revenue neutral. This means they are trying to redistribute the tax load so that they can begin to raise taxes to make up for the structural deficit.

Tom Delay’s Fair Tax solution

Rep. Linder (R-GA) is the lead sponsor in the House, but he is a dentist and frankly, he’s not the sharpest knife in the drawer. Linder is no doubt a Club for Growth puppet who does what he is told by the Republican mafia led by Tom Delay and Grover Norquist. And since we are cutting through the deceptions here - we’ll just call it "Tom Delay’s Fair Tax Plan."

In the first part of this article (see previous page), it was shown that the effective sales tax rate of the Fair Tax plan will be between 60 percent and 80 percent of every dollar spent - except for dollars spent on education. They plan to remove all taxes based on income for both corporations and individuals. Under the Fair Tax plan, at an income level of about $135,000 annually, their tax bite begins to decline over what they are presently paying in income taxes. At an income of about $300,000 they hit an effective zero tax liability relative to their tax bill under the current system. Essentially, the Republican plan shifts the tax liabilities of corporations and the taxes paid by the top 20 percent of income earners to the backs of bottom 80 percent of income earners - giving the corporations and the wealthy a free ride. Adding insult to injury, the Fair Tax plan eliminates social security, Medicare, unemployment insurance and disability insurance programs by eliminating the funding streams for them—the payroll taxes.

A simple way to see how the Fair Tax plan will impact your standard of living is to look at your gross pay. If you make less than about $60,000, using the most conservative of the estimates, simply subtract 60 percent of your gross pay and consider that as the amount you will have to pay in sales taxes under the Fair Tax plan. The remaining 40 percent is what you will have to live on for all your needs. The ‘prebate’ (sales tax rebate check before the sales taxes are incurred) check from the government based on a poverty level income to ALL households will add about $200 a month to your spendable income (23 percent of $10,000 in 12 monthly installments). This check will help you, Bill Gates and Warren Buffet offset their sales taxes paid monthly - so glad we can help.

After you pick yourself up off the floor and put your teeth back in your mouth - consider contacting the members of the House of Representatives listed below. They are the co-sponsors of this legislation according to Thomas, the government’s search engine for legislation. If your member of Congress is not on this list, then check the list below that. It is the list of sponsors from the American for a Fair Tax website (AFT). Since the Thomas list seems to be up to date, one has to assume that the sponsors on the AFT website made a commitment to support the legislation but they are too chickensh*t to put their names on the official record because they know how bad this legislation really is. Below that are links to the Americans for a Fair Tax ‘scorecard’. This is their record of who will support the legislation when it comes up for a vote even though they are not co-sponsoring it.

For links to references and congressional audio hearings, go to www.channelingreality.com

Co-Sponsors of H.R. 25, Fair Tax Act of 2005

In the House Sponsored by Rep. John Linder (R-GA)

Rep Akin, W. Todd [MO-2] Rep Bachus, Spencer [AL-6]

Rep Baker, Richard H. [LA-6]Rep Bartlett, Roscoe G. [MD-6]

Rep Bilirakis, Michael [FL-9]Rep Bonilla, Henry [TX-23]

Rep Bonner, Jo [AL-1]Rep Brady, Kevin [TX-8]

Rep Brown, Henry E., Jr. [SC -1]Rep Burton, Dan [IN-5]

Rep Carter, John R. [TX-31] Rep Conaway, K. Michael [TX-11]

Rep Crenshaw, Ander [FL-4]Rep Cubin, Barbara [WY]

Rep Culberson, John Abney [TX-7]Rep Davis, Jo Ann [VA-1]

Rep Deal, Nathan [GA-10] Rep DeLay, Tom [TX-22]

Rep Drake, Thelma D. [VA-2] Rep Duncan, John J., Jr. [TN-2]

Rep Feeney, Tom [FL-24] Rep Flake, Jeff [AZ-6]

Rep Franks, Trent [AZ-2] Rep Gingrey, Phil [GA-11]

Rep Granger, Kay [TX-12] Rep Graves, Sam [MO-6]

Rep Gutknecht, Gil [MN-1] Rep Hall, Ralph M. [TX-4]

Rep Hefley, Joel [CO-5] Rep Hensarling, Jeb [TX-5]

Rep Hunter, Duncan [CA-52] Rep Keller, Ric [FL-8]

Rep King, Steve [IA-5] Rep Kingston, Jack [GA-1]

Rep Lewis, Jerry [CA-41] Rep McCaul, Michael T. [TX-10]

Rep Mica, John L. [FL-7] Rep Miller, Gary G. [CA-42]

Rep Miller, Jeff [FL-1] Rep Moran, Jerry [KS-1]

Rep Myrick, Sue [NC-9] Rep Neugebauer, Randy [TX-19]

Rep Ney, Robert W. [OH-18] Rep Norwood, Charlie [GA-9]

Rep Pearce, Stevan [NM-2] Rep Poe, Ted [TX-2]

Rep Price, Tom [GA-6] Rep Sodrel, Michael E. [IN-9]

Rep Stearns, Cliff [FL-6] Rep Sullivan, John [OK-1]

Rep Tancredo, Thomas G. [CO-6] Rep Thornberry, Mac [TX-13]

Rep Tiahrt, Todd [KS-4] Rep Westmoreland, Lynn A. [GA-8]

Rep Young, Don [AK]

Rep Davis, Geoff [KY-4] - (withdrawn - 3/3/2005)

Sponsors from the Americans for a Fair Tax website

As of July 19, 2006

The complete list of FairTax sponsors and co-sponsors, as of July 4, 2006:

Sponsors:

Rep Linder, John [GA-7]

Sen Chambliss, Saxby [GA]

Co-Sponsors, Senate (3)

Sen Coburn, Tom [OK] - 9/6/2005

Sen Cornyn, John [TX] - 4/4/2006

Sen Isakson, Johnny [GA] - 5/22/2006

U.S. House - 54

Rep Akin, W. Todd [MO-2] - 3/1/2005

Rep Bachus, Spencer [AL-6] - 1/31/2006

Rep Baker, Richard H. [LA-6] - 3/8/2005

Rep Bartlett, Roscoe G. [MD-6] - 2/9/2005

Rep Bilirakis, Michael [FL-9] - 1/25/2005

Rep Bonilla, Henry [TX-23] - 2/8/2005

Rep Bonner, Jo [AL-1] - 3/14/2006

Rep Brady, Kevin [TX-8] - 1/4/2005

Rep Brown, Henry E., Jr. [SC-1] - 9/13/2005

Rep Burton, Dan [IN-5] - 9/29/2005

Rep Carter, John R. [TX-31] - 10/18/2005

Rep Conaway, K. Michael [TX-11] - 3/8/2005

Rep Crenshaw, Ander [FL-4] - 3/16/2006

Rep Cubin, Barbara [WY] - 2/8/2005

Rep Culberson, John Abney [TX-7] - 1/4/2005

Rep Davis, Jo Ann [VA-1] - 10/28/2005

Rep Deal, Nathan [GA-10] - 1/4/2005

Rep Drake, Thelma D. [VA-2] - 6/8/2006

Rep Duncan, John J., Jr. [TN-2] - 10/18/2005

Rep Feeney, Tom [FL-24] - 3/14/2006

Rep Flake, Jeff [AZ-6] - 1/4/2005

Rep Franks, Trent [AZ-2] - 4/26/2005

Rep Gingrey, Phil [GA-11] - 3/15/2005

Rep Granger, Kay [TX-12] - 6/19/2006

Rep Graves, Sam [MO-6] - 4/13/2005

Rep Gutknecht, Gil [MN-1] - 1/4/2005

Rep Hall, Ralph M. [TX-4] - 2/8/2005

Rep Hefley, Joel [CO-5] - 5/19/2005

Rep Hensarling, Jeb [TX-5] - 2/1/2005

Rep Hunter, Duncan [CA-52] - 10/6/2005

Rep Keller, Ric [FL-8] - 5/3/2005

Rep King, Steve [IA-5] - 1/4/2005

Rep Kingston, Jack [GA-1] - 1/4/2005

Rep Lewis, Jerry [CA-41] - 5/3/2005

Rep McCaul, Michael T. [TX-10] - 1/25/2005

Rep Mica, John L. [FL-7] - 6/12/2006

Rep Miller, Gary G. [CA-42] - 2/9/2005

Rep Miller, Jeff [FL-1] - 1/25/2005

Rep Moran, Jerry [KS-1] - 2/28/2006

Rep Myrick, Sue [NC-9] - 4/12/2005

Rep Neugebauer, Randy [TX-19] - 2/1/2005

Rep Ney, Robert W. [OH-18] - 3/2/2005

Rep Norwood, Charlie [GA-9] - 1/6/2005

Rep Pearce, Stevan [NM-2] - 2/8/2005

Rep Poe, Ted [TX-2] - 10/27/2005

Rep Price, Tom [GA-6] - 1/4/2005

Rep Sodrel, Michael E. [IN-9] - 3/1/2005

Rep Stearns, Cliff [FL-6] - 3/1/2005

Rep Sullivan, John [OK-1] - 1/31/2006

Rep Tancredo, Thomas G. [CO-6] - 9/13/2005

Rep Thornberry, Mac [TX-13] - 4/6/2005

Rep Tiahrt, Todd [KS-4] - 2/8/2006

Rep Westmoreland, Lynn A. [GA-8] - 1/4/2005

Rep Young, Don [AK] - 5/5/2005