Remember stop, look and listen before you cross the street? Follow this cautionary tale before you swallow the balanced budget language of Presidential candidate and former Governor of New Mexico Gary Johnson and the 9-9-9 tax system of former CEO Herman Cain. Simple slogans can be dangerous.
Lobbying the FairTax for a year sent me further and further from Fair Tax mania. FairTax advocates claim that their national sales tax is simple, good for the economy, and an equitable way to finance the federal government. They even suggest the IRS would simply disappear. Such claims are made in the book, The FairTax Book: Saying Goodbye to the Income Tax and the IRS by Neal Boortz and John Linder. None of these claims are true.
For many years, the FairTax billionaire advocates, fresh from a success in changing Texas tort reform law, hired economists to work their policy magic. Most bad bills die mercifully in committee. Instead, like many potential laws that sit on legislative desks too long, complexity (in the tax world, loopholes) formed to help get FairTax out of committee.
My paid efforts began by adding advocates to The Coalition for Fundamental Tax Reform; in a few months we represented more than 13 million voters. Voters know the current tax system is the most wasteful in the world and is helpful only to special interests and their politicians. FairTax and flat tax advocates got along temporarily to provide the new Bush Administration with support for strong policies that were good for the economy.
Unlike Obama, George W. Bush did not attempt widespread reforms. Although even the static Congressional Budget Office estimated in 2001 that Americans waste more than half a billion dollars annually in tax compliance, the White House and the Treasury Department made tax cuts their goal. It was an early warning sign that the Bush Administration was not willing to fight for the right.
Pre-9-11, Bush promised fundamental tax reform at the beginning of his second term. Representative Dick Armey, economist and Texas Republican, asked the Coalition to join him in passing a flat tax in Congress, signaling that it could pass in 2001 or wait decades, and foretelling his imminent retirement. FairTax advocates felt that their fundraising would suffer if they were in competition with a flat tax instead of blasting the current IRS loophole-ridden system, and refused to compromise for the good of the country.