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'Fair Tax' rally to be held Saturday

Thursday, June 11, 2009 | 12:01 a.m. CDT; updated 5:16 p.m. CDT, Monday, June 15, 2009

COLUMBIA — When Ray Walker moved to Jefferson City in 2005, he said the words “fair tax” were basically unknown.

“Now, it’s not uncommon to go down the street and mention ‘fair tax,’” said Walker, who is the director of the group in Missouri’s 4th Congressional District backing the tax reform movement. “Invariably, someone is going to know about it.”

Walker is helping organize the Midwest Fair Tax Rally from 8 a.m. to 4 p.m Saturday at the Boone County Fairgrounds. What started as a small regional event, he said, has ended up attracting national attention.

“We are having people who have at least indicated interest from all across the nation,” Walker said, listing stats. He said the interest has prompted his group to block out rooms at local hotels.

The day-long rally will feature scheduled speakers including Joe Wurzelbacher, better known as Joe the Plumber during the 2008 presidential campaign. Other speakers include Missouri Rep. Ed Emery, R-Lamar; Jessica Wexler, an organizer for President Barack Obama and Sen. Claire McCaskill's campaigns; and Neal Boortz, radio host and political commentator.

“What I’d like to see is folks come together and leave there with a significant amount of knowledge that will energize them to see this fair tax passed at the Missouri state level and the national level,” Walker said. “I want to see people leave here with the drive and the passion to get it done. This country is in financial trouble.”

The "fair tax" plan is a proposal that aims to replace the federal income and payroll taxes with a national retail sales tax. Instead of being taxed for income, individuals are taxed for spending. The plan calls for an increase in sales taxes for all goods and service, which is compensated by rebates issued to taxpayers. Proponents of the bill also say that the plan is revenue-neutral, meaning there is no net loss or gain from the halt of income tax revenue.

This federal income tax legislation is similar, but not identical, to the state tax reform legislation; the state's legislation also wanted to abolish the income tax. Local supporter and Columbia insurance broker James Coyne testified on behalf of legislation approved earlier this year by the state House of Representatives to replace the state income tax by raising the sales tax on goods and services. “This needs to be a non-partisan idea," Coyne said.

Coyne also said it would be nice to see Rep. Chris Kelly, D-Columbia, at the rally. Kelly joined Emery and other Missouri Republicans to push the consumption tax legislature through the House. The Senate did not approve the legislation.

When asked if he would be attending the rally, Kelly replied, “No, I’ll be canoeing.”  Kelly dislikes the term “fair tax,” saying it panders to political and editorial slogans. He would rather use “sales tax” to describe the state initiative.

Kelly believes that compared to the income tax, the sales tax is more difficult to cheat and, logistically speaking, less expensive to collect. Also, it’s far more popular of an tax option than the income tax.

The Institute on Taxation and Economic Policy (ITEP), a Washington-based policy research organization that has an office in Columbia, differs greatly from the rally organizers' point of view. In a May 1 report from this year, ITEP says the combined sales tax rate on every purchase would have to increase to about 12.5 percent – up from 5.11 percent – for the bill to be truly revenue-neutral.

ITEP also says that the burden of the increased sales tax will fall on lower income and middle-class families, while Missouri's wealthiest 1 percent would see the highest tax cuts.

A schedule and other details about the rally can be found at midwestrally.com.


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Comments

Eric Cox June 11, 2009 | 11:41 a.m.

If I saved more than I spent this would be awesome, but who falls into that category? Right it's the rich, and it's the rich who would benefit the most from this because they have more money to invest instead of spending it on necessities.

I'm no economist and I'm looking at it very simply, so I'd be more than willing to hear the flaws of my argument.

(Report Comment)
John Schultz June 11, 2009 | 2:42 p.m.

"The (evil, nasty, brutish) rich" don't just save more money than they spend, they also lend it as capital investments and give it to charities.

One doesn't have to be "rich" to save money - IRAs, Roth IRAs, and 529 plans all take very small monthly investments that add up over time to much more than one would get from Social Security. People should spend more time studying compound interest than who is winning on American Idol or Dancing with the Stars.

(Report Comment)
Eric Cox June 11, 2009 | 2:57 p.m.

Of course the rich have all kinds of other ways to use their money to make money. I didn't say the rich are evil or anything of the sort, I also didn't say poor people shouldn't save money. I said I don't understand why I would support this unless I was saving more money then I was spending ie. unless I was rich.

(Report Comment)
Mark Foecking June 11, 2009 | 4:42 p.m.

Eric Cox wrote:

"If I saved more than I spent this would be awesome, but who falls into that category?"

Me. It's all a matter of planning and deferred gratification.

DK

(Report Comment)
Elaine Briggs June 11, 2009 | 4:59 p.m.

I think one of the ideas being tossed around with the fair tax is some sort of rebate for lower-income families for their estimated sales tax. It's a decent concern, but if you have a sales tax, it comes with everything you buy, automatically. The rich are more likely to have tax shelters and deductions and credits galore to avoid income taxes. Sales tax doesn't give that option.

For DK, the Fair tax is a way of not getting hosed for being responsible.

(Report Comment)
Eric Cox June 11, 2009 | 5:42 p.m.

Mark Foecking good for you, I'm happy for you. I still don't support it. I am also planning to be in that category (saving more than spending) but hindering me now by increasing my tax burden isn't going to help me get there.

(Report Comment)
John Schultz June 11, 2009 | 6:45 p.m.

Just for S&G's, I took a look at what the wife-unit and I paid into the state for income tax last year. I took our income times the proposed sales tax rate of 5.11% (based on the assumption that most of what I make post-tax and retirement contributions will be spent on goods and services) to see what my total tax burden would be. Looks like I would be on the hook for a little over $1500 more in taxes, but then one has to figure in the monthly prebate check. With a family of four and the federal poverty level of $22,050, I *think* that would give us a yearly reimbursement of 5.11% times that value, or $1126.76. If I did all of my figuring right, I would pay a little over $500 more in taxes, again assuming I spent all of my income on goods and services.

Amusingly, what was withheld by the state last year is awful darn close to what I would have paid out if the current state sales tax was the value of the proposed fair tax.

(Report Comment)
Allan Sharrock June 11, 2009 | 9:38 p.m.

I still think anything is better than what we have now. No more paying somebody to tell me how much I owe the government. No more IRS.

(Report Comment)
John Schultz June 12, 2009 | 3:08 a.m.

Bit of a correction if what I just read is correct, the proposed increase would be from 3% to 5.11%, plus the 1.225% for conservation tax, etc. etc. That would make my theoretical tax burden about $2K greater, again assuming I spent every single post-tax penny that my wife and I made.

I'm not sure how non-partisan ITEP claims to be (unlike the Missouri Budget Project), but wish that Rep. Chris Kelly's proposal had passed to have state government do some investigation into just what sales tax rate might required.

(Report Comment)

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