Steve G.

Texas Libertarian Debates Fair Tax National Communications Director

In Libertarian on July 15, 2008 at 4:19 am

Is the “Fair Tax” national sales tax proposal a good plan for America? Not according to the Executive Director of the Libertarian Party of Texas, Wes Benedict (that would be me).

Ken Hoagland, National Communications Director for Americans for Fair Taxation, and Wes Benedict debate the Fair Tax June 14 at the 2008 Libertarian Party of Texas state convention.

View excerpts of the debate in the video below:

In case the video doesn’t display above try the link below:
http://seananderson.blip.tv/#1079998

Special thanks to volunteer Sean Anderson for recording the debate and posting the video online. Also note that Sean is still editing many videos from the LP Texas convention and it’s possible this video may be updated in the future and not available from these links posted.

[Technical difficulty from new blog contributor (that would be me)–why can’t I get the video to display as an image properly.  I tried it on my personal blog and it worked just right:  http://wesbenedictforlnc.blogspot.com/2008/07/texas-libertarian-debates-fair-tax.html]

  1. Wes, thanks for taking on the sales tax idea. I think it is a terrible idea. I much prefer the idea Ron Paul espoused of eliminating the personal income tax and replacing it with nothing.

    Revenue neutrality, an argument Bob Barr has made in favoring the nationalist sales tax, makes my teeth ache. As Ron Paul points out, if there is no reduction in revenues, there is no pressure to reduce the size of government.

  2. Revenue neutrality, an argument Bob Barr has made in favoring the nationalist sales tax…

    Can you point to someplace where Barr argues in favor of revenue neutrality?

    Disclaimer/clarification: This is not a defense of Barr. It’s a request for information.

  3. “Technical difficulty from new blog contributor (that would be me)–why can’t I get the video to display as an image properly. I tried it on my personal blog and it worked just right.”

    WordPress is really picky about what code you can put on your blogs. They make it easy to do YouTube and Google videos with their special code, but I have had trouble with any other sites that let you embed videos in HTML.

  4. From Barr site: http://www.bobbarr2008.com/issues/

    Cutting spending would allow America to implement real tax reform. Our goal should be to reduce both the tax burden on Americans and the intrusion in their lives resulting from IRS enforcement of the income tax. One of the best approaches would be to adopt some form of a consumption tax, like a national sales tax, replacing the Internal Revenue Service and all federal income taxes as well as payroll taxes.

    It is not enough to eliminate the income tax. We also must repeal the 16th amendment, which authorizes Congress to levy an income tax. Without doing so, there would be an ever-present danger that a future Congress would attempt to bring back the income tax on top of the Fair Tax or any other alternative to the income tax.”

    Is cutting spending and reducing the tax burden revenue neutrality?

  5. Jim Davidson Says:
    July 15, 2008 at 5:16 am

    Revenue neutrality, an argument Bob Barr has made in favoring the nationalist sales tax, makes my teeth ache. As Ron Paul points out, if there is no reduction in revenues, there is no pressure to reduce the size of government.

    Well said Mr. Davidson! Mary Ruwart has said the same thing, but went one step further regarding Barr . . . since Barr supports the “Fair Tax”, how dedicated could HE be to reducing the size of the federal government? Not very, as the answer is very clear. Unfortunately, the mesmerized LP delegates did not see this (I and 275 others did however!) because Barr was going to put the LP on the map, after all . . . right? . . . the “statist” map to be sure!

  6. Does anybody really buy this . . . “Our goal should be to reduce both the tax burden on Americans and the intrusion in their lives resulting from IRS enforcement of the income tax.” as libertarian??

    Our goal should be? Why doesn’t Barr say that HIS goal is to eliminate the burden and intrusion? Because that ISN’T his goal!!! There was a time, not very long ago where that WAS the goal of the LP! No more, as the reformers and Barr have effectively gutted this libertarian opposition to coercion.

    Some “Party of Principle”, huh?

  7. If one of you gentlemen can find a quote where Barr uses revenue-neutrality as an argument for a national sales tax, *that* would be very helpful. Fulminating about Barr’s evilness when he has been fairly careful to say nothing too damning (on this particular subject) on the record doesn’t help much, as far as I can tell.

    I think part of the reason Barr was successful is that he is pretty slick at the say-nothing game, and his opponents did not work hard enough to nail him on the things he *did* say, and push him to take more specific positions. Mouth-foaming because we ‘know’ he is evil without presenting evidence may be cathartic, and it may stimulate the people already on your side (although just into more mouth-foaming, usually), but it does little to convince people who are trying to be objective that you are right about Barr.

    We can continue making the same mistake, or we can start marshaling and presenting actual evidence. Textual analysis of slips such as using ‘should’ rather than ‘is’ are interesting, but not the sort of evidence I am looking for. If someone has a *quote* from Barr where he suggests that revenue neutrality is an argument in favor of the national sales tax, I’d like to see it.

  8. Referring back to the “babbarr” reference to the Barr website (I don’t go there . . . I don’t want to give the extra “hits”, or start gagging), can anyone explain how his “position” on taxes is any different than most Republicans?

    How would enforcement of a national sales tax, over time, be any less intrusive than enforcement of the income tax? The answer is, it wouldn’t be. Once the lobbyists get to work on it, there will be exemptions here, deductions there, surcharges on the wealthier, etc. In short, it will go the same route as the income tax went from 1913 to present, only a lot quicker. the welfare state is already here, whereas in 1913 it was extremely limited, and was built up once the politicians realized that the income tax was a wellspring of goodies to dole out!

    In short, the “Fair Tax”, or any replacement tax for the income tax is a very, very bad idea. The real long term danger is that since the citizenry already generally accepts a federal tax on “income”, adding to it a federal tax on “consumption” is just one more giving in to that the government owns you. The federal government owns your productivity, and with the “Fair Tax” it owns what you consume as well.

  9. Susan, you are absolutely right about Barr . . . he covers his tracks well. After all, he is a politician.

    However, since it is widely known that the “Fair Tax” is revenue neutral (Boortz and Linder say so in their book) and since Barr has indicated support for it, I think it is fair to assert that he also supports the revenue neutrality of it as well, especially since he has not excepted that part of it.

  10. Barr, has NOT said that he supports the “Fair Tax”, but he believes that the rate is too high, as he ants to cut taxes and not maintain revenue neutrality.

    I think Barr is clever enough that it takes knowing what he didn’t say to call him out on what he supports.

    Surely, the reason Barr didn’t participate in the “unnofficial” all-inclusive debate at the LP convention, is that he would likely have gotten a question of this sort (among others he didn’t want to answer). . does he support the “Fair Tax”, including the revenue neutrality aspect if it.

    Unfortunately, I think that the only way to nail him, is to point out what he DOESN’T say.

  11. Steve, I think you’re wrong. Barr specifically addresses spending *first*, and then taxation. He also does not refer to the “Fair Tax” as such, but to “some form of a consumption tax, like a national sales tax”.

    An objective reading of his site indicates that he supports a national sales tax – which I agree is wrong and is a bad idea, evil, horrendous, antilibertarian, blahblah – but does not show any support for the concept of revenue neutrality. People who want to indict Barr with his own words need to be careful they are actually *doing* so. Otherwise, he gets away with being weaselly and our side looks like a bunch of mouth-foamers who are deliberately slandering Barr.

    We need to be fair and just to our friends, and *even more so* to those whom we oppose. We need to be more scrupulous in representing Barr’s position I think, or *we* wind up looking bad.

  12. Unfortunately, I think that the only way to nail him, is to point out what he DOESN’T say.

    That’s fine, as long as you don’t put words in his mouth. Suggesting that he supports revenue neutrality when he has at least made noises to the contrary (or has said nothing on the subject) is doing just that. Can’t you see where that hurts *us* more than *him*?

    But as Jim made the original assertion, perhaps he has some specific quote from Barr using revenue neutrality as an argument for a NST.

  13. Wes, what was your sense of the audience after this debate? I know several local (and even state – booo!) parties have endorsed the FT.

  14. Well, Susan, you may be right in that he no longer specifically endorses the Boortz/Linder tax plan. I thought that there was an endorsement of such a plan in his original “exploratory” website, but it may not be there now.

    So, you’re right . . . the fact that Boortz is his friend, and Barr has endorsed his tax ideas in the past doesn’t mean that he is endorsing revenue neutrality per se. Unless it can be shown that Barr now, currently endorses the Boortz/Linder tax plan, it would in fact be putting words in his mouth that he supports revenue neutrality of a reform tax plan.

    I will however say this, which some may take issue with – the 16th Amendment did NOT “authorizes Congress to levy an income tax”. During the Civil War under Lincoln, an income tax was enacted. As a matter of fact, much of the very same basis language was carried over from the Lincoln era tax to the statutes which were enacted in 1913-1914. There were various corporate income tax schemes prior to the 16th amendment. Also, several Supreme Court cases uphold that the 16th amendment did not give congress any more taxing authority, and several cases correctly identified the “income tax” as an excise tax (an indirect tax), which wouldn’t fall under the apportionment necessity of a direct tax. Constitutionally, congress always had authority to levy an excise tax. When people say that the 16th amendment took away the necessity of enacting a direct tax with apportionment among the several states, they incorrectly state that this is the basis of the income tax. The income tax NEVER had to be apportioned. . . . it is an excise (indirect) tax!

    This is not me asserting this . . . this is in the Supreme Court decision language.

    I would submit, the problem is outside of the 16th amendment . . . it lies in the concept that Americans are to accept a tax on their productivity AND their consumption, i.e. taxed at the point of production, and taxed at the (end) point of consumption, all at the federal level.

  15. I would submit, the problem is outside of the 16th amendment . . . it lies in the concept that Americans are to accept a tax on their productivity AND their consumption, i.e. taxed at the point of production, and taxed at the (end) point of consumption, all at the federal level.

    I’d agree, if you would stop here:

    I would submit, the problem is outside of the 16th amendment . . . it lies in the concept that Americans are to accept a tax …

    But if there was no taxation, how would presidents buy huge tracts of ill-gotten lands from dictators?🙂 (just a fun poke at Jim Davidson and Thomas Jefferson re: Louisiana Purchase)

  16. Regardless of what is and isn’t said, this is still very bothersome to me, and should IMHO be very bothersome to any libertarian:

    “Cutting spending would allow America to implement real tax reform.

    Barr could say something like, “I want to cut federal government spending so much that the tax burden on Americans will be drastically reduced, and done without forcing other detrimental effects on the economy through deficit spending or increased taxation on business”.

    But he doesn’t say anything of the sort. In fact the cutting spending wording is only in proximity of (not necessarily related to) the next part:

    Our goal should be to reduce both the tax burden on Americans and the intrusion in their lives resulting from IRS enforcement of the income tax. One of the best approaches would be to adopt some form of a consumption tax, like a national sales tax, replacing the Internal Revenue Service and all federal income taxes as well as payroll taxes.

    Barr doesn’t continue the prior concept of “cutting spending” and directly relate it to the tax reform “America” should do. That is, he doesn’t continue by saying something like,

    “In order to implement these drastic tax and spending cuts, a tax plan must be enacted which would collect far less in tax than is now being collected, which would force these drastic spending cuts to happen, something like Ron Paul has suggested that spending levels could fairly easily be reduced to year 2000 levels.”

    Bu again, he doesn’t say that either. He just says that the “goal should be . . .”, and doesn’t say that as president he would be dedicated to achieving this by submitting budgets to congress with such drastic cuts. Nor is his position to ask for the congress to work on a tax plan commensurate with
    such reduced federal spending. There is a disconnect between the “taxing” and “spending” portions, even though the two concepts are loosely part of the same “issue”. He never really ties them together.

    Barr IS a “politician”, and like all “politicians”, I don’t trust him. His words are cleverly crafted to deceive, and make you THINK he wants to do all this wonderful tax and spending cutting, but if called on it, he has his “out” . . . that “out” is “the goal should be”, not that he was going to push hard for it.

    Mary Ruwart is right . . . without a specific call for massive tax reduction, Barr isn’t really dedicated to the proposition of drastically lower taxes and spending.

  17. usanhogarth Says:
    July 15, 2008 at 7:22 pm

    I’d agree, if you would stop here:

    I would submit, the problem is outside of the 16th amendment . . . it lies in the concept that Americans are to accept a tax …

    You know that I take no exception to that! However, on the margin, I was merely trying to get the point across that by enacting a federal sales tax, VAT or “Fair Tax”, it is premised on the citizenry accepting another BASIS for federal taxes levied on their lives; consumption in addition to production.

  18. Relax, Steve. Just a bit of radical humor, there.

  19. All that being said however, most people probably aren’t going to dissect the deficiencies of Barr’s positions like I do. Believe me, from a libertarian standpoint, Barr’s positions as outlined leave a lot to be desired!

  20. “radical humor” . . . I know.

  21. In watching and listening to the video, Ken Hoagland thinks the “fair Tax” will make taxes more visible.

    How many people didn’t at first look to see what was taken from their paycheck in taxes? How many people subsequently then just said, “that’s life”, you know, the famous phrase, “nothing’s sure in life but death and taxes!”. The same thing will happen with the taxes collected on things bought. First . . . shock at how much is taken in tax. Then, resigning oneself to “that’s life”.

    I think that there is a much better way to get visibility of taxes, and it will not be commonplace . . . every time you buy, every weeks paycheck, etc. No, ONCE every year!

    Simply by eliminating the withholding tax would be a much better way to provide visibility of federal taxes! Remember, this is just once a year. People take notice of things which happen sporadically. whin it is commonplace and frequent, most people just accept it as common, and there to stay. BUT ONCE A YEAR, WITH THOUSANDS OF DOLLARS BEING BILLED FOR . . . NOW PEOPLE TAKE NOTICE OF THAT!

    The visibility argument of the “Fair Tax” falls flat. It is also a more elaborate plan to sell, requiring much more work to drum up support than simply eliminating the withholding tax.

    So, in short the “Fair Tax” is a lot of work to achieve virtually nothing. Even the “privacy” aspect would disappear after a few years. Terrible plan, but then what would you expect from the phony Neal Boortz?

  22. I don’t care too much about the fair tax … it is surely better than what we have now, and surely worse than what we will have eventually if we don’t insist that America make the leap from QuasiSocialism to AnarchoCapitalism in one jump … but wow, you guys are really grasping at straws for a criticism of Barr. Saying “our goal should be” rather than “our goal is” is merely a rhetorical flourish of dubious value.

    So I’m assumming you guys are supporting McCain or Baldwin. Which is it? The “all war, all the time” candidate or the theocrat?

  23. So I’m assumming you guys are supporting McCain or Baldwin.

    Big leap. No, it’s my own party’s candidate I am interested in analyzing and critiquing. But from the little I’ve read about Baldwin, I suspect you do him an injustice by calling him a theocrat.

  24. Rich Paul Says:
    July 15, 2008 at 8:56 pm

    I don’t care too much about the fair tax … it is surely better than what we have now . . .

    Name one thing better.

  25. “Saying ‘our goal should be’ rather than ‘our goal is’ “, is not the argument I’m making.

    The position should be, IMHO is “I fully support , and will fight to . . . ”

    Barr comes nowhere near making this strong a “libertarian” stance. Reason: he isn’t a libertarian.

  26. Susan says:
    Wes, what was your sense of the audience after this debate? I know several local (and even state – booo!) parties have endorsed the FT.

    Wes says:
    I’m sure opinions were mixed but couldn’t estimate the percentages one way or another. Texas had lots of candidates supporting the Fair Tax in 2006. However, the 2006 Texas Convention was clearly against proposing a national sales tax (and they didn’t put it in the platform). The 2006 state executive committee voted on the FT and rejected it.

    I’m working to make the Libertarian Party of Texas a real political party. Real candidates in real situations are often limited to sound-bites of a few words or a sentence or two.

    I’d prefer to have candidates say:
    1. I’m for cutting taxes and spending.
    or
    2. I’m for eliminating taxes and government spending.

    rather than:
    1. I’m for a Fair Tax.

    I’m afraid mentioning “Fair Tax” to the average voter sounds too much like when people say:
    “1. Corporations and the wealthy need to pay their fair share of taxes,” which usually implies raising taxes and more government spending.

    We’ve got to market our party to the masses but if what they here is we want to raise taxes and implement new taxes, that will just chase voters away and relegate us to being a small in-fighting party, not a real political party.

  27. Oh, I mentioned the 2006 convention because I was the organizer of the 2008 convention and missed most of the content in 2008.

  28. Steve LaBianca said:

    “Simply by eliminating the withholding tax would be a much better way to provide visibility of federal taxes!”

    That’s not all it would do.

    Instant 10-25% take-home pay raises, all around.

    That’s every paycheck, not this one-time bogus “stimulus check”. (My money still hasn’t been returned to me yet!)

    That’s one helluva continued boost to the economy in a large hurry.

    I ran some estimates on that a few years ago when the first set of these checks was going around. I figure that eliminating withholding would stimulate the economy to the tune of $80B every two weeks.

    Nowadays, it’s most likely more.

  29. Chuck Baldwin is not a theocrat.

    As an atheist, I’d rather have a constitutional religious fundamentalist (Baldwin) than an out-and-out statist (Bob Barr).

  30. Michael Seebeck Says:
    July 15, 2008 at 11:09 pm

    (regarding my idea to eliminate the withholding tax)

    That’s not all it would do.

    Instant 10-25% take-home pay raises, all around.

    I agree 100% Michael. However, I was only citing the superiority visibility of eliminating the w/h tax, over the so-called “Fair Tax” method of federal tax collection.

    Thank you though, for actually showing what the ULTIMATE reason for eliminating the withholding tax . . . people KEEP their hard-earned productivity, and the economy then benefits . . . everyone!

  31. I don’t care too much about the fair tax … it is surely better than what we have now,

    I happen to think it’s a lot worse than what we have now.


    So I’m assumming you guys are supporting McCain or Baldwin. Which is it? The “all war, all the time” candidate or the theocrat?

    The choices I am currently considering: not voting; or, if I vote: Barr, McKinney or Charles Jay if I vote in a state where he is on the ballot.

  32. In my opinion, I agree that I’d rather see taxes go bye bye. But I’d rather see them go bye bye after the fairtax has been implimented. There is a greater grassroots movement pushing the fairtax then there is for no tax. Let’s at least put it in the peoples hands first by taking it away from income the income side.

  33. For: NoGovNoTax

    Taxes are the price societies pay to live in relative civilized, never perfect social harmony… with the opposite of government being chaotic anarchy. And outside Hammurabi’s Code its been that way since the first books of law, we know as religious texts were written.

    You mention “fair tax.” I hope by this you mean a flat rate “consumption tax” set at a rate of say 10%, affordable to even the poorest U S Citizens, where if you for instance, when you go out and buy yourself a boat say for $10,000,00, you will pay the same tax rate of tax that mister mega money money bags does when he buys his $1,000,000.00 yacht. Figure the math. What could be more equitable when ever purchase made is taxed at the same 10% rate?

    However I think that only as you said “I’d rather see taxes go bye bye” happens the rich will never stop moaning.

    But let’s put “no taxes” into a reality perspective….who would build and maintain roads and highways and bridges, and airport lights and runways etc. etc.; and all the other things that facilitate our lives that we’ve all grown accustomed too?

    The answer to government and the people inside government and the taxes they collect is for us, “we the people” demanding to take an active role in making it absolutely sure that the government insiders spend whatever taxes they do collect within a strictly set prudent budget and not one cent more, and that fellow Citizen puts an end to the feeding frenzy and spending binge with never ending rise in prices that government contractors have been on for the past five decades.

    Succinctly put we either have government of, by, and for all the people as prescribed by our Constitution or we continue to have oligarchy rule performed by the very people we elect and place our faith by proxy in, with all the average John Doe Citizens continuing to play the part of slaves bound to taxes at rates they have no active part in setting.

    The answer for root blame for our problems can be found by looking honestly into our own mirrors…because it was and still is we the voters that keep electing and reelecting officials that take full advantage of us after they are once seated in office.

    The first step we should have taken forty years ago but didn’t, was by united voters demand for strict term limitations for every elected office from pillar to post.

    The second step that should have been taken but didn’t was by united voter demand to ban all elected officials and paid professional special interest lobbyists contact period l with the punishment for breaching the no contact ban being imprisonment for first offense. Severe punishment? Yes. But no more severe than putting some average John Doe citizen in jail for having committed a lesser crime as we all see done every day.

    What say you to these proposals third party hopefuls?

    The ball is in our courts. Do we fumble again or score?

  34. For: NoGovNoTax

    Taxes are the price societies pay to live in relative civilized, never perfect social harmony… with the opposite of government being chaotic anarchy. And outside Hammurabi’s Code its been that way since the first books of law, we know as religious texts were written.

    You mention “fair tax.” I hope by this you mean a flat rate “consumption tax” set at a rate of say 10%, affordable to even the poorest U S Citizens, where if you for instance, when you go out and buy yourself a boat say for $10,000,00, you will pay the same tax rate of tax that mister mega money money bags does when he buys his $1,000,000.00 yacht. Figure the math. What could be more equitable when ever purchase made is taxed at the same 10% rate?

    However I think that only as you said “I’d rather see taxes go bye bye” happens the rich will never stop moaning.

    But let’s put “no taxes” into a reality perspective….who would build and maintain roads and highways and bridges, and airport lights and runways etc. etc.; and all the other things that facilitate our lives that we’ve all grown accustomed too?

    The answer to government and the people inside government and the taxes they collect is for us, “we the people” demanding to take an active role in making it absolutely sure that the government insiders spend whatever taxes they do collect within a strictly set prudent budget and not one cent more, and that fellow Citizen puts an end to the feeding frenzy and spending binge with never ending rise in prices that government contractors have been on for the past five decades.

    Succinctly put we either have government of, by, and for all the people as prescribed by our Constitution or we continue to have oligarchy rule performed by the very people we elect and place our faith by proxy in, with all the average John Doe Citizens continuing to play the part of slaves bound to taxes at rates they have no active part in setting.

    The answer for root blame for our problems can be found by looking honestly into our own mirrors…because it was and still is we the voters that keep electing and reelecting officials that take full advantage of us after they are once seated in office.

    The first step we should have taken forty years ago but didn’t, was by united voters demand for strict term limitations for every elected office from pillar to post.

    The second step that should have been taken but didn’t was by united voter demand to ban all elected officials and paid professional special interest lobbyists contact period l with the punishment for breaching the no contact ban being imprisonment for first offense. Severe punishment? Yes. But no more severe than putting some average John Doe citizen in jail for having committed a lesser crime as we all see done every day.

    What say you to these proposals third party hopefuls?

    The ball is in our courts. Do we fumble again or score?

  35. as a geolibertarian i prefer to eliminate all income and other related taxes and replace it with a sales tax and land value tax.

    such taxes would go to fund government with a large chunk of it being returned back to the people in the form of a monthly prebate so that everyone will have equal access to the land and natural resources.

    it is in the spirit of thomas paine’s agrarian justice.

    i might add a small corporate tax to help boost the monthly check and to balance the field between corporations and small business. a direct non-renewable natural resource tax and trade tariffs to balance wage inequalities between nations would also be considered.

    if you want to talk fairness, you need to talk about the fairness of making sure everyone has their own piece of god’s green earth.

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