Roanoke Area FairTax

(NOTE: Read the results of this meeting here.)

U.S. Rep. Bob Goodlatte will be meeting with Roanoke Area FairTax supporters on October 8^th as previously announced.  The meeting will be in the Community Room of WDBJ-7 Studios, 2807 Hershberger Rd. NW, Roanoke.  WDBJ-7 is in the northwest section of the intersection of Hershberger Rd. and Route 581.   The meeting begins at 6:45pm (sharp) and the doors open at 6:00pm.  Mr. Goodlatte plans to stay until 8:00pm and will only take questions and comments regarding the FairTax.

Goodlatte, of Virginia’s 6^th District, is only one of the three Congressmen that RAFT is trying to convince to support the FairTax in Congress.  The others are Virgil Goode of the 5^th District and Rick Boucher of the 9^th District.  As of today, Goode already is a co-sponsor of the FairTax bill while neither Goodlatte nor Boucher supports the bill.  Goodlatte has said that, if pushed to decide, he would vote for it.  Boucher essentially refused to talk to a RAFT member a few years ago and is considered to be an opponent.

Goodlatte’s importance to RAFT comes from the fact that most of us who live in Roanoke County live in Goodlatte’s district.  Goode’s district is east and south of Roanoke County and many RAFT supporters live in it.  Boucher’s district stretches southwest to the Tennessee border; however, RAFT is trying to make deeper in-roads into that area.

Goodlatte, then, is the one we are working hard to impress.  He has agreed to meet with RAFT, which represents people who live in all three districts.  We think, however, that the questions and comments you might have represent those of most FairTax supporters.

This is our opportunity to prove that we are a force to be reckoned with.  If you can possibly be there, do so even if we have SRO.  Be there even if you don’t plan to ask a question or make a comment.  THIS IS YOUR CHANCE TO MAKE A DIFFERENCE! Your presence WILL make a difference.   Bring along friends and family who support the FairTax!

If you don’t plan to ask a question or comment then you don’t need to read further.  But, please plan to join us to show your support!

Goodlatte has received many letters from constituents urging him to support the FairTax.  Over the past year or so, his written responses have contained the same measure of support and the same group of “concerns.”  In an effort to help you understand his positions and formulate your question or concern, I have summarized his positions in the table below alongside the positions of Roanoke Area FairTax.

If you can’t be at the meeting but would like to ask a question or make a statement, send it to me (RAFT@cox.net) and I will present it for you.

If you decide to attend and ask a question or make a comment, we have set up rules to give as many as possible a chance to do so.  Numbers will be given out on a first come basis.  The doors will be opened at 6:00 and the meeting will start at 6:45 (sharp).  Number-holders may ask one question or make one comment.  If time permits, we’ll start over again in case some would like another turn.  The Q&A portion will end when Mr. Goodlatte leaves but we will conduct some business following that, such as discussing what we might do next as a result of the meeting.

ISSUE	GOODLATTE’S VIEW	RAFT’S VIEW
Positive aspect	He thinks that taxing spending rather than earning is good, that compliance costs would be low, and that not taxing savings and investments is good.  He thinks that economic growth could result.	We agree!
Legislative environment	He has introduced a bill to abolish the Internal Revenue Code by the end of December, 2010 and to approve a new Federal tax system by July, 2010.	We wonder whether Congress will actually agree to abolish the income tax before knowing what will replace it!
General overview	Many of the following “concerns are shared by the Heritage Foundation….and the President’s Advisory panel on Federal Tax Reform.”	The Heritage Foundation has no such concerns; it just prefers a flat income tax but would accept the FairTax.  The President’s Panel, rather than sharing his concerns, was the source for most of them.   FairTax.org has roundly criticized the panel for re-designing the proposal before finding things wrong with it.
Prebates	Payment of prebates “would create a new entitlement program – by far the largest in American history.”	The prebates, which are refunds in advance for taxes that will later be paid to purchase basic goods and services, are not an entitlement!  They are no different from exemptions and deductions allowed on tax returns, except they are paid in advance
Tax rate	“It is estimated that (the) program would require a tax rate of at least 34%, and likely higher over time if the base erodes due to exemptions.”	Economists who studied the bill as written concluded that 23% would work.  The President’s panel called for the higher rate after redesigning the proposal!  Base erosion “due to exemptions” would be done only by Congress and is why the current tax code is such a mess.
Effective tax rate	After presuming this 34%-plus sales tax, he says it “could still impose quite a burden on (low income) families.”  A family of four “needs to be taxed at a rate that could be 40% including Virginia sales tax.”	He has failed to take into account the removal of currently-embedded income taxes of about 22% before application of the 23% FairTax (as the bill is written).  Addition of the prebate causes the effective tax rate of a family of four to be 0% at $26,400 rising to just about 15% at $80,000!  This is far lower than 40% including the Virginia sales tax.
Administrative burden	“The administrative burden for a national retail sales tax would likely be similar to the burden under the current system.”	The agencies needed to administer the much simpler FairTax will be much smaller than the IRS.
Complexity of transition	“A tax of this nature poses other problems such as the difficulties associated with the transition to a new tax system,” individuals who paid tax on savings “will be taxed again,” and “the cost to small retailers collecting the tax would be 6.5% of taxes collected” vs. less than 1% for large retailers.	Simplicity should trump difficulty and if we can put a man on the moon we should be able to install a new tax code.  *  Yes, those who invested taxed money will pay the FairTax when spending that money.  However, they won’t be disadvantaged, they just won’t be advantaged like others will be.  The problem should be of limited duration and perhaps some accommodation will be made.  *  The small business cost is based on one 10-year-old state study and might be different now.  Either way, no such burden should be allowed to fall on small business owners without compensation.
Impact of transition	Transition to the FairTax would force some “to make sweeping changes in the way that they do business.”	The transition can be managed by affording enough lead time and adequate information.  If we can put a man on the moon….
Politics	“It is unlikely that action will be taken on the FairTax while the Democrats are in the majority, since they are largely opposed to the FairTax and have shown little inclination to address tax reform.”	This is a non-partisan idea.  The first party to do it is hero-of-the-day but public pressure is still needed.

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