Lambro is right in asserting that some people actually spend all of their earnings just buying the basic necessities of life. What Lambro obviously doesn’t understand is that under the FairTax every single legal household in this country would receive a check (probably in the form of a credit to a charge account or a debit card) every month equal to the amount of the FairTax which that family would be expected to pay on those necessities during the ensuing month. By way of example, using current poverty statistics the “prebate” for a household of four people would be $506.00 per month. Add that $506.00 to the fact that no household will see anything deducted from their checks for income taxes or for Social Security or Medicare taxes … and you see a substantial rise in real income for the very families that Donald Lambro was so concerned about; the poor and middle income. The president’s own tax reform commission stated that the FairTax was the only tax reform plan out there that would completely untax the poor (at the federal level). How does that square with Lambro’s dire warnings on the effect of the FairTax?

Now … Rudy Giuliani. Yesterday the AP reported that Giuliani said that the FairTax would hurt homebuyers. Rudy said “I think there are several tax deductions that are vital to our economy. This would not be a good time – I don’t know if there would ever be a good time to do this – to advocate ending the home mortgage deduction. The home mortgage deduction is considered by many critical to the ability of people to buy a home and keep their home.”

Giuliani just can’t be serious on this. Since he clearly hasn’t thought this through, let’s do it for him.

What does the home mortgage interest deduction do for people? Simple: It allows them to deduct the amount of interest they’ve paid on their home mortgage from their taxable income. This results in a lower taxable income figure and lower taxes. Now .. let’s approach one of these home owners and ask them a simple question. Would you rather have a nice income tax deduction so that your taxes would be lower, or would you not have to pay income taxes at all? The point here is so ridiculously easy even a politician can understand it --- a tax deduction is of no value whatsoever to someone who does not owe taxes! Under the FairTax all income taxes are gone! You are never going to find someone whining that they wish they owed some taxes so that they could make use of a tax deduction.

Congressman Linder, the author of H.R. 25, The FairTax Act, and I have authored another book “FairTax, The Truth: Answering the Critics.” This book, published by Harper Collins, will hit the bookstores on March 11, 2008. We offer our regrets and apologies to Lambro and Giuliani for not sending them a manuscript of this book when we finished it three weeks ago. It might have kept them from making fools of themselves.