Responding to still more absurd attacks on the FairTax

Posted: Dec 04, 2007 12:05 AM

Last week during the Republican presidential debate televised by CNN there was a thunderous reaction from the crowd upon Governor Mike Huckabee’s mention of the FairTax. CNN, in fact, said that Huckabee’s mention of the FairTax during that debate brought the strongest positive audience reaction they’ve seen to this point.

Many reasons have been cited for Mike Huckabee’s surprisingly strong showing in the polling ahead of the Iowa Caucus, among those reason’s being Huckabee’s endorsement of the FairTax. This comes as no huge surprise to either Congressman John Linder or me. When we saw The FairTax Book debut No. 1 on the New York Times Bestsellers list in 2005 we knew the FairTax was a tax reform plan that the people were going to love.

The people … but not necessarily the politicians.

There is simply not the space here to fully describe the FairTax here. Let’s just say that it replaces all corporate and personal federal income and payroll taxes, along with capital gains taxes and the death tax, with one federal embedded sales tax at the retail level. You don’t pay any more for your toilet paper and milk than you do now, you get your entire paycheck, and April 15th becomes just another Spring day. You can buy The FairTax Book if you want to know more, or visit

Once again, though, I find myself offering a column in response to still more absurd – irresponsibly so – attacks on the FairTax. This time the attacks come from Washington Times political reporter Donald Lambro and Republican presidential candidate Rudy Giuliani. Both of these men are too smart to have written what has been attributed to them, so we must suspect the work of ill-informed research assistants or staffers. Actually, I’m just trying to be nice. They may really believe what they’ve been saying.

Let’s deal with Donald Lambro first and just let Rudy twist in the wind for a few moments longer.

Lambro’s misrepresentation of the FairTax is particularly distressing in light of the fact that I think that he’s a very gifted writer. I’ve used his columns for program fodder many times. We’re all entitled to a bad day though, and this time Lambro blew it. Lambro’s column, which appeared yesterday here at, was titled “Not Everyone Loves Huckabee.” That column contained this gem of a reference to the FairTax:

“Huckabee says he would like to eliminate the Internal Revenue Service and replace the income tax with the so-called Fair Tax, which would impose a national sales tax on virtually everything we buy. But such a tax would be a disaster for this country, especially for low- and middle-income Americans who spend a disproportionate portion of their earnings -- in many cases all of it -- on the necessities of life.”

What? Can it be even remotely possible that Donald Lambro has taken any time at all to study the FairTax? If so, it sure doesn’t show in his writings. Permit me, please, to set you straight.

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.