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Aug. 29, 2007 - Rush Limbaugh Program
36:26
August 29, 2007, Wednesday, Hour #3
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The favorite word of the left is fair.
They're always pursuing policies that they argue are fair.
Somehow conservatives are unfair, but they're fair.
So I don't like that word fair.
I have a bias against it, and I have a distrust of anything that is sold as somehow being fair.
There's a proposal out right now that actually is coming from the right.
It's a serious proposal, and a lot of people like it.
They're calling it the fair tax.
I hope they rename it because I don't like the term fair.
I want to spend a little bit of time here this hour on this.
It's an interesting idea.
I think politically it's not going to go anywhere for reasons that I'll explain in a second.
But it is an interesting idea.
And there are a fair number of conservatives and some liberals, but it's predominantly a conservative idea, who like this thing a lot and are pushing it hard.
One of the Republicans running for president is using it essentially as the main plank in his campaign.
And he's getting somewhere with it.
Mike Huckabee, a former governor of Arkansas, who ran second in that Iowa straw poll a couple of weeks ago, and is probably doing better than any of the so-called also rans in the Republican race.
He advocates this.
What it essentially is is replacing the entire federal income tax system.
Federal income taxes would go to zero.
Wouldn't exist.
You wouldn't pay federal income taxes anymore.
You would not pay a tax based on your income.
Instead, we would replace it with a national sales tax.
Their proposal, the number they've thrown around is 23%.
It would mean that you wouldn't pay anything anymore in income taxes.
That your income would not be the determinant as to how much money you would get the federal government.
Instead, it would be based on sales.
Their argument is that this is fairer because the best indication of how much disposable income and essentially how rich a person is how much stuff they buy.
For example, there are many people, and they're usually liberals, who are extremely wealthy but don't have very high incomes.
Much of their wealth is inherited.
The Kennedys fall into this category.
Bunch of elected officials, they've never had really high incomes, but they inherited a lot of money and a lot of property.
they have a lot of assets.
Very easy for them to advocate higher taxes on income when their income isn't that high.
It's a way of going after people who have tremendous assets, but earned it all already, and therefore aren't paying much in income taxes.
On the other hand, the income tax hits hard the person who's trying to become rich, the person in the upper middle class who may not have a lot of assets yet, but is successful in his or her career, and is trying to build for the future.
That person gets dinged really hard and is hit at the highest federal income tax bracket, which is around 40%.
Yet that person may actually be far less wealthy than someone who has a lower income.
So they're proposing the fair tax.
I think the idea has some merit.
Because the current income tax system is weighted very heavily to punish the upper middle class.
Low income people don't pay any income taxes at all.
The income tax rate really doesn't even kick into 20 until $20,000.
And between 20 and 40, it's very, very low.
It's a very small percentage of your income when you consider how many deductions are available to almost all people.
Even if you're up to 50 and you have several kids, you're able to knock that tax rate down quite a bit.
Once you get over 80, up to several hundred thousand dollars, though.
You are paying a tremendous percentage of your annual income to the federal government.
That group is hit the hardest.
And the reason why the income tax is always going to be a target for Democratic politicians to increase is that right now most people don't pay much in income taxes.
You're selecting a handful of people to pay the largest portion of the burden of supporting the government.
On the other hand, a sales tax pretty much would hit everyone, and it hits them in direct relationship to how much they have.
A person who's able to sp afford $5,000 on a 15-year-old car is going to pay a rather small tax on that.
The person who buys the Lamborghini is going to pay a lot.
On the other hand, politically, I just don't think this is going to go anywhere, and in the end, it's going to sink Huckabee's candidacy.
When you start talking about creating a new tax, a lot of people, even conservatives, are going to be very, very resistant.
They're going to be suspicious that all that will happen is we'll replace the income tax with the fair tax, the sales tax, and three years later they'll bring back the income tax and we have another tax.
The other thing that it's going to do is take a lot of people who right now aren't paying a whole lot in income taxes and dramatically increase their burden.
The argument is that the sales tax is regressive.
Since there are some things that everyone needs to buy, and they cost the same regardless of your income, that tax will hit people at the lower end much harder than it would people at the higher end.
So I don't think it's going to go anywhere.
But I do think that the idea has at least some merit.
Bruce Bartlett is a uh Republican economist.
He wrote a column in the Wall Street Journal over the weekend that really trashed the idea.
I'll give you a few of his paragraphs.
He's anti-fair tax.
He writes For those who have never heard of it, the fair tax is a national retail sales tax that will replace the entire current federal tax system.
It was originally devised by the Church of Scientology in the early nineties, the supporters of this dispute that, as a way to get rid of the Internal Revenue Service with which the church was then at war.
The Scientologist's idea was that since almost all states have sales taxes, replacing federal taxes with the same sort of tax would allow them to collect the federal government's revenue and thereby get rid of their hated enemy, the IRS.
Representative John Linder of Georgia and Senator Saxby Chandless, also Republican of Georgia, have introduced legislation to implement the fair tax.
They assert that a rate of 23% would be sufficient to replace federal, individual, and corporate income taxes, as well as payroll and estate taxes.
Payroll taxes are your tax for Social Security and Medicare.
Estate taxes, of course, that's the death tax.
Linder's website claims that U.S. gross domestic product will rise 10.5% the first year after enactment.
Exports will grow 26%, and real investment spending will increase an astonishing 76%.
But in reality, the fair tax rate is not 23%.
Linder and Shamless get this figure by calculating the taxes if it were already incorporated into the price of goods and services.
Calculating it the conventional way that every other sales tax is calculated, with the tax on top of the price yields a rate of 30%.
The distinction is confusing, but think of it this way.
If a product costs one dollar at retail, the fair tax adds 30% for a total of $1 and 30 cents.
This is only the beginning of the deceptions in the fair tax.
And he goes on.
Now I want to throw this out there.
This is an idea.
You can argue that this is totally abstract, that it's never going to go anywhere politically.
But at least it gets us thinking about the best way to support the federal government.
It also requires us to at least consider the notion that the current incomes tax system is completely screwed up.
If you'd like to weigh in on this, that the telephone number at Russia's program is 1-800-282882.
Let's go first to uh Rose Mead, California and uh Dave.
You're on the Rush Limbaugh program.
Hi, how are you doing?
I'm great, thank you.
Okay, first of all, we need to understand something that almost nobody Understands.
There is one group of people who pays all taxes.
That is the end consumer.
The price, the price of any product, the cost of paying all the workers, which includes what they're going to have to pay in taxes, it's factored into the price of that product.
You're right.
Okay.
So if you if you get a situation where businesses, investors do not pay taxes.
In other words, when General Motors buys buys tires, they don't pay tax on that tire.
They don't pay taxes.
Well, they do, but they try to recover it by putting it into the price.
You're right.
So do you like this?
Do you like the fair tax proposal or not?
Under the fair under the fair tax proposal, which I like about it, is companies, you would not you would not pay tax on investment expenses.
Business expenses would be tax free.
The only thing you would pay the only person who would pay tax is the guy who buys a Chevrolet.
Well, why is that good though?
Well, that's going to make a Chevrolet a whole lot cheaper.
Why?
Okay, because if if I don't if if the if the tire comp if a rubber company doesn't have to pay taxes, and the steel company doesn't have to pay taxes, and the um and the um plastic company.
Well you you see where you're going with it.
You see where you're going with this, though.
The the people who are going to criticize this are saying, great.
What you've just done is you've lowered taxes on all the corporate investors in the steel companies, the rubber companies, and the car companies, and you've slapped it all on the poor guy trying to make ends meet by giving him an enormous sales tax.
That's the way this thing's going to be attacked, and the supporters are going to have to come up with an answer for it.
You are right.
If there is no income tax, there is no disincentive to earn a lot of income.
Right now there is.
Corporations and individuals spend half their lives figuring out how to make their income appear as low as possible so they aren't dinged on taxes.
If people simply were allowed to keep everything they earned, with the exception of the percentage in which they bought, you'd have a lot more productivity in the economy.
You are right about that.
On the other hand, you can't get past the fact that this would seem to indicate to hit people who consume a lot of stuff very, very hard, particularly those who right now don't pay a lot in taxes.
Thank you for the call.
Let's try Pompano Beach, Florida and Tom.
Tom, it's your turn on the Russian Limbaugh program.
Yeah, hi, Mark.
Uh it's a pleasure to speak with you.
Uh I'm uh very supportive of the fair tax.
As a matter of fact, I've given a couple of uh speeches in front of groups uh pushing it.
And uh the last caller, he's right in that uh everybody only individuals pay taxes, corporations don't, they just charge more for their product.
Now, what will happen realistically that the price of new goods and services, excuse me, uh will come down about I'm gonna say roughly twenty-five percent, because the corporations will have to pay income taxes, payroll taxes, they didn't need high priced economists, they don't need high price lawyers, excuse me, and so forth.
So if somebody say, for example, is gonna buy a hundred dollar items gonna cost seven fifty, they put the tax on top of that, it still costs a hundred dollars.
Okay.
In theory, you're right.
Okay.
But the i it's only a theory because it hasn't been tested.
Let me turn this around on you.
Go ahead.
Do you want to add thirty percent to the cost of every piece of real estate in the United States?
Sure.
Why?
Because the real estate will go down by thirty percent before you add the thirty percent on.
Why would it?
Because the What's the cost associated in the real estate?
Let's suppose I try to sell my house.
I've already paid everything out in terms of what the what's going to be in that home.
Maybe I fix it up and maybe I hire a cleaning lady.
I've already put everything in, but under this, I'd have to slap 30% on the end of that, you'd have to pay that in tax.
My house would now be 30% higher.
That's a good thing.
No, actually, you would you would not be able to sell it for that amount.
You would have to reduce the price.
Oh, you'd have to reduce the price.
Why is that good for me?
Well, it might not be good for you, but everything, everything that you buy, you're paying less for, even with the taxes, you're paying no more than you're paying right now.
So everybody would have to everybody would have to reduce their prices.
I'm not sure you're gonna have an easy time selling All of those people who will be getting less for what they're selling, including the home that you describe, that that's necessarily a good thing.
There are arguments for and against this, and I'm not sold on it.
I do think that it has merit.
What has happened so far is that Huckabee has gotten the support of people like the college that we have had so far who think that this is a great idea.
What hasn't happened is people have hurt, you know, have thought about what it would mean for their own individual lives, and for a lot of people, it mean that they they'd be spending a lot more on stuff than they are right now.
Do you like it or not?
Increase the price of every product by thirty percent by creating that tax, but don't pay any other for taxes to the federal government at all.
My name is Mark Belling, and I'm sitting in for Rush Limbaugh.
I'm Mark Gulling sitting in for Rush Limbaugh.
Mike Huckabee, former governor of Arkansas, Republican candidate for president, is probably the most prominent politician right now advocating doing away with the federal income tax system.
He wants to replace it with a national sales tax.
The supporters say 23%, the critics say it would be 30%.
It depends on which numbers you use.
Is that a better system than we have right now?
Politically, I think it goes nowhere.
You can imagine how the critics would be able to distort the proposal.
Practically speaking, it may or may not be an improvement.
To Peter and Enid Oklahoma, it's your turn on the Rush Limbaugh program.
Hi, Mark.
Thanks for taking my call.
I have one idea, and I don't come from it uh from me, it comes from Adam Smith, that if you let the government tax every single transaction, the government has to get into the shop to find out what's happening in every single shop.
So this is I mean, it sounds great because you might be saving.
Well, yeah, except we already have this, though.
Almost every state has a sales tax as they as it is.
Right, they do.
But they don't really know how they're going to uh collect it.
Well, they'd probably collect it the same way.
They'd simply have the states calculate what the amount of money is, and that money would be given to the federal government.
I mean, there is a way to do it, and there would obviously be that be ability for fraud, some retailer trying to get away with selling a product without collecting it in the same way that people are always looking for ways to avoid reporting any income that they have.
The question is whether or not it's better than the current system.
And I think it would be for people who have a very, very high income, but it would not be for people who don't have a high income but may have a lot of wealth, or people who don't have much money at all.
With regard to consumption, let's take the individual who buys a house that may be a little bit more than they can afford.
Well, you're slapping a big chunk of money on that individual.
Is that fair or is it not fair?
I think that the people who are pushing this have to address that.
Now they may argue that this may be a deterrent to overspending, that we live in a society in which everybody's living off of debt, everybody's running their credit card to the max.
Maybe if you were dinged every time you bought something, people would save more for their futures and would invest more.
On the other hand, we are a consumer-driven society.
What would it do to our economy if we created a disincentive to actually run around and spend money?
Uh, thank you for the call.
Let's try Atlanta and Tony.
Tony gets your turn on EIB.
Hey, good afternoon, sir.
Hi.
I am for the fair tax.
Uh I'm afraid you've misrepresented some of it, though.
Uh, you left out the uh piece about the prebate checks uh that each family would get to help for the basic necessities of life.
Uh it's based on each person in a household, not off of income, but each person, whether you're Bill Gates or uh Joe Glow on the street, would get per person a fixed amount so to meet the day the uh bay pay the tax for the basic necessities of life.
And that's based off the uh poverty level.
So when you when you claim that people would be paying more for uh goods and services, that's not really true.
They would be getting money back to cover those goods and services that they need for food and uh medical items and the basic necessities.
Won't go a long way to paying for the Lamborghini, would it?
Well, no, but uh that person, since he's got that extra disposable income would uh help pay more of the taxes.
Do you need a Lamborghini to uh get back and forth?
No, no, you don't, but no, you don't, but that's the classic democratic argument.
Do you need this?
Do you want this?
What we what you're doing, what you're essentially doing by creating this tax is taking away the current disincentive for high income, which is a bad thing, and replacing it with a disincentive for consuming.
It may be that in the overall abstract academic scheme of things, that that is a better way to do it.
Since we live in a society that doesn't save enough, that doesn't invest enough, but maybe spending beyond its means, this may be a better way to go.
In terms of deciding who it is that's being taxed, what you have to establish is that the current system isn't right, and that the and that the system that you want to uh substitute as a replacement is somehow better.
It may well be better.
The hard part is going to be to sell this thing politically.
I'm Mark Belling sitting in for Rush Limbaugh.
We are exploring something here.
I don't know that this is a political discussion so much as it is a philosophical discussion.
If Huckabee gets somewhere in the Republican race for president, and he's banking on this issue, getting him somewhere, because as you're hearing from colleagues, there are a lot of people who like the idea of creating a national sales tax and dumping the income tax.
Then you'll have a debate.
Because if he gets somewhere, other Republicans are going to have to react to that proposal, and if he would somehow win the nomination, the Democratic candidate will discuss it.
I think politically, it is always hard to sell the notion of a new tax or a change.
As I've said, what I think the supporters have to do is make an argument that the current system needs to be replaced, that the current system is fouled up, that the current system doesn't work.
In reading the arguments that have been made, I think that they're selling what they like about the new system without addressing the first part of why we need a change in the first place.
I think there's a lot to recommend with regard to this.
I do want to clarify the comment that I made about a house.
Uh the proposal as this as designed by its uh proponents would only apply to new products, not use their existing products so something couldn't be taxed more than once.
In other words, if I built a home and tried to sell it, I'd have to impose that tax or collect the tax for the federal government, but if I was selling an existing house, I would not.
Clarksville, Virginia.
Richard, it's your turn on the Rush Limbaugh program with Mark Belling.
Hi, Mark, how are you?
I'm great, thanks.
Uh it's Clarksville, Georgia, actually.
What did I say?
Uh, Virginia.
Oh.
I'd rather you be in Virginia, but you're right.
It does say Georgia right on my screen.
Well, I have read the uh excuse me, the fair tax book, and one of the points they make is that there is so much business that is driven offshore because of the punishing taxes on production.
And when that's removed, there's so uh it should be a great boon to the American economy to attract so much more business back when once uh taxes on production are removed.
Well, you're right about that.
A company that makes something in the United States is being taxed and taxed and taxed.
Let's start with the fact that they've got to collect a payroll tax, a social security tax, which is nearly seven percent on every worker that they that they have there.
Also consider the fact that there is a tax on their profits, consider the fact that they are subject to capital gains taxes if they make an investment and sell it, not to mention the fact that all of their workers have to pay a high income tax, and therefore that drives up your payroll costs because you have to pay people enough to accommodate the fact that they're paying all of those taxes.
On the other hand, you make something in China, you're not facing any of those constraints at all.
You are right about that.
It would be something that would free up an entrepreneur to make a product without being dinged every step of the way by the federal government.
The ding would occur when he was trying to sell his product, but everybody would be paying that same ding.
Uh uh another point is when you say that uh poor people do not pay corporate or do not pay income taxes, they certainly do because of the embedded corporate income tax in everything they buy every time they spend.
That's true, but they don't pay to the same degree that somebody who makes two hundred thousand dollars a year pays.
That's true.
And for that reason and for other reasons, I certainly agree with you that it'll be very hard to sell because uh, you know, politically, because it'll be so easy for critics to muddy the water.
Well, and and and probably for good reason.
Let's imagine you made thirty-five thousand dollars a year and you had three kids.
You're paying almost nothing right now in federal income taxes.
One of the things that I fear in the coming years as the government has its insatiable need for more revenue, as income taxes are paid by a smaller percentage of the public, that it's going to be easier politically to keep increasing it because so many people don't pay any income taxes at all or pay a relatively low rate where it isn't something that drives them.
On the other hand, if you're in that forty to forty-five percent bra uh thirty-five to forty percent bracket and you don't have nineteen zillion deductions, you are carrying the rest of this country.
And that's where I think that this idea is going to get a fair amount of uh good reception.
For the people though who are toward the bottom, or the Teddy Kennedy Paris Hilton types whose income isn't that high but have tremendous assets, they're not going to like this.
Take Paris Hilton as an example.
Her income probably isn't huge because so far as I can tell, she doesn't do anything, but her consumption is extremely high.
She would be a classic case of someone who would maybe that's the way to sell this thing.
Create the tax that finally dings Paris Hilton.
Thanks for the call.
Atlanta and Jay, it's your turn on the Rush Limbaugh program with Mark Belling.
Hi, Mark.
Um I agree with you that it's the political viability of this thing is tough, but I don't think it's because you couldn't sell it to the public if it were explained well.
There are two main points that make it virtually impossible.
The first one being that the sixteenth Amendment would have to be repealed before it would go into effect, even under the terms of what uh Linder and Borts have written.
That requires two thirds of the Congress and three fourths of the legislatures.
Where you're really running into the problems is that the elected politicians who use the tax code as a way of buying votes, have their power taken away.
And they're not going to let that happen anyway, anyhow, any time.
Well, you are right.
The current income tax code is an absolute mess.
I own racehorses.
First of all, I got to file in ninety-eight, thousand states or so it seems.
The return that I have to submit, which I have no idea was i i what's in there, my accountant prepares the whole thing, it goes on forever.
It's the thing is seventeen inches high.
It just keeps going on and on and on and on and on because the code has been made so complicated.
There are so much so many arcane things in there.
This break for that, this penalty for that, this credit for this thing.
You're right.
And Congress is responding to a political desire on each and every one of those breaks, some of which are good breaks, others of which are bad breaks, but it's a very complicated, complex system that gives Congress a lot of power.
And it all creating a simple You're right.
Creating a a sales tax would take some of that power away.
But we presume that if this thing was enacted, they'd never monkey with it.
Couldn't you see them do the exact same thing with this these sales taxes?
Well, let's charge a higher rate on automobiles that are over forty thousand dollars a year.
Well, let's exempt this.
Let's exempt that.
I think they'd have the same potential to manipulate that they do under the income tax system.
But those that but that would be much more transparent and to and obvious to the taxpayers and the people who vote.
What you're talking about is accountability.
They don't want it.
If you mess with a sales tax, the basically what you can do is raise or lower the rate or exempt certain items from the tax.
That everybody can see and that they can vote about.
If you play around with an arcane tax system uh with all these various tax breaks and put it in a code that's you know will fill up the entire shelf of a of a CPA's uh office with all the books just to hold the code, then it's very easy to hide this stuff, and the voters never really So you think it's a good idea.
I think it would be a good idea, but it's kind of like Christianity.
It's a great idea, but if anybody ever tried it.
Well, but it's not, you know, I just don't see how politically you can get it past the people who have to enact it at the legislative.
Was that a sh was that a shot of Christianity or No, it was it was a shot at the fact that people uh resist good ideas simply because it's a change.
Have you figured out in your own personal life if it would save or cost you money?
I don't think it would make any difference at all in the overall cost.
See, I think for most people it would one way or another, and in order for the numbers to end out the same, let's imagine the government collected X dollars right now.
And the goal of this thing is not to change what that X is.
Right.
Obviously, some people would pay a greater share and others would pay less.
That's why they create this c this term fair tax.
It's an implication that the current system isn't fair.
And I agree the current system has a level that is not fair at all in that many people who have tremendous income.
Bill Gates, for example, excuse me, tremendous wealth.
He owns a zillion shares of Microsoft.
But his income is based on whenever he takes a capital gain when he sells that tax and the salary he has, salary he has at Microsoft.
So he isn't paying anywhere near what somebody else who has a higher reportable income but maybe worth a lot less money pays.
That is one of the fundamental flaws that we have in the current system that it's going after people who are trying to get rich, not so much going after people who already are rich.
There are a lot of Americans who have far less money than Teddy Kennedy, who pay a lot more in taxes than he's paying on his salary as a United States Senator.
Thanks for the call.
Houston and Ken, it's your turn on the Rush Limbaugh program.
Well, Mark, thanks for talking about this.
I'm actually the national spokesman for FairTax.org.
I'm real happy you're talking about it.
Love to hear that you've got a pretty solid grasp of the way the current system uh works or doesn't work, I should say.
Probably a couple of little details about the fair tax you don't have quite right.
Love your idea while I'm on it, though, about the Paris Hilt, and we're always looking for new ways to explain this to people.
Um look, the poor let me just start out.
The poor do not pay income taxes.
They pay the most regressive tax of all.
That's the FICA tax.
Social Security, yeah.
Eliminates the FICA tax and yet provides a broader stream of revenue into both Social Security and Medicare.
Now, who pays more and who pays less?
You gotta start with the idea that you're broadening the taxpayer base because right now twelve to twenty million illegal immigrants aren't paying federal taxes, they will under the fair tax as consumers.
You have a trillion and a half dollars in the underground economy that doesn't contribute to the federal system.
That will all those drug dealers who are buying speed boats now they become taxpayers.
For that matter, you've got forty million forty thousand foreign tourists a year.
It's not a big number.
I particularly like the idea, however, that French tourists come into New York City will become American taxpayers.
That's just my personal favorite.
Do you not have a concern that this would discourage consumption and therefore be something that would limit the expansion of the American economy?
Well, if not for the fact that you're now for the first time taking home pre-tax income, you're taking home your whole paycheck without federal deduction.
Well, you're right, and most people have no idea what that actually is.
Imagine if you could keep the first line on your check.
That would be a dream.
So that would be an absolute dream.
If they would just let me do that once a year, I would be elated.
Same here.
So you're taking home a hundred percent of your paycheck.
People are gonna feel a lot wealthier.
Uh and look, when you look at the distributional effects of this, who wins and who loses, the greatest benefit of the fair tax is at the bottom of the income spectrum into the middle class.
This tax actually taxes wealth when spent.
You said it just a moment ago.
Millionaires spend more than the rest of us, and so they pay the same rate as everybody else.
Now I'll tell you, you're right.
How do you sell this to the retiree on a fixed income who saved money all of his or her life and is now finally spending it, spending a little bit of it, but doesn't have a high income and may simply be living off their investments, so therefore they don't have a high income tax.
How do you sell it to them?
The pre-bate check that goes to every American household, not illegal immigrants, but every other American household is going to wipe out the fair tax on the necessities of life.
The retiree wants to take uh a 401k contribution or a deduction, rather, or any other retirement program.
Now they're not going to be penalized for it.
They have any stock um profits.
They're not going to be taxed on that.
And when they leave their wealth to the next generation, the next generation of their family is not going to pay taxes on what it is.
There's one flaw in all of that, though.
It presumes that future Congresses and future presidents, after they get this new tax, don't just bring back all of the old ones.
Well, that's the fear that I have whenever we create a new tax is that they're simply going to add it to the arsenal rather than make it revenue neutral, which is what those of you who are advocating it, uh, that's how you have it proposed.
In practice, once President Hillary gets her hands on it, who knows where the rate will turn out and whether or not they would actually eliminate anything else.
I do appreciate your input.
Thanks for the call.
My name is Mark Belling sitting in for Rush.
Mark Belling sitting in for Rush Limbaugh.
We're going to move on to a couple of other things.
A couple of other thoughts about this fair tax proposal, which is a national sales tax.
One of the concerns that I think you have to have about this is how easy it would be to increase the tax.
Most states that started sales taxes did so 30, 40, and 50 years ago.
They almost all came in at one percent.
Those taxes have now increased by about ten times.
That's far more than we've increased the income tax rate.
Secondly, local governments all over the place are using sales taxes to fund everything.
Once you put this thing in place, you're opening the door to an eventually 35% and 40 and 45 and 50 and 55 and 60 percent national sales tax rate.
You're giving politicians a lot of power here.
The other concern is is that you're giving them another weapon in their arsenal.
While the fair tax as proposed makes a lot of sense, there's no guarantee it's going to be enacted the way the proposers are proposing it, or that it will stay that way.
You can imagine what would happen if Charlie Schumer and a Hillary Clinton got their hands on it.
I do think it is a very interesting proposal, though, because it forces us to start thinking about whether or not the income that people earns is the best way for the federal government to run everything from Social Security to all of its operations.
There's an interesting story in the news today that isn't getting a lot of attention because of the conclusions that you might draw upon learning it.
Mukhtada al-Sadr, he's the guy that runs the Mahdi Army.
One of the groups that we're having a lot of trouble with in Iraq, is suspending operations for six months, saying he needs to reorganize his force.
Do you think they'd be doing that if they were still showing success?
In the meantime, Al Qaeda's being run out of the cities in Iraq and is being run out of the areas along the rivers.
Once they're in the desert, they're exposed.
What's happening here, I think, is militarily, the surge is undeniably working.
That's why Democrats are no longer ripping the surge and they're changing the focus to, yeah, but is the Iraqi government doing its part?
Are they taking over enough security operations?
Are they making enough progress to stand on their own?
That is a valid point.
And I think they raise an interesting issue there.
If there was a flaw in the Bush administration's policy in Iraq, it's not in wanting to win.
It's not in trying to defeat terrorists, it's not in trying to stop a nuclear Iran from developing.
I think they've put all of their eggs in the basket of the current government, the Al Malekai government, simply because that's the one that won the election.
If something else emerges to run Iraq, and it is a pro-American anti-terrorist government, that wouldn't be a bad thing.
And if this particular regime isn't able to pull it off, maybe we should be open to another one.
This is not a reason to leave Iraq.
It is a reason to question whether or not we should be so tied to the current elected government there.
My name is Mark Belling sitting in for Rush.
I'm Mark Belling sitting in for Rush Limbaugh.
I was glad to be able to take nearly a full hour on the program today to discuss this national sales tax proposal, the fair tax.
I'm probably now going to be the hero of that movement because they got a lot of publicity and a lot of attention for their idea.
I'm not necessarily endorsing it.
I do think the idea of questioning whether or not payroll taxes and income taxes are the way to fund the government is a good question.
And it's proof once again that every new idea, whether you buy it or not, right now is coming from the right.
There's ideas that are out here that are being examined, but almost all of them are coming from the conservative movement.
The liberal movement has nothing but dredging up the same old stuff from the past.
Hope you enjoyed me.
I'm Mark Belling.
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