Tuesday, July 31, 2007

Fred Thompson on the "Fair Tax" Pledge: Yes!


July 30, 2007

He is not yet an official presidential candidate but former Tennessee Sen. Fred Thompson has already promised voters he'd sign a major overhaul of the American tax system if passed by Congress.

Asked last week on camera if he would sign the "Fair Tax" bill if it were passed by the House and Senate, the "Law & Order" actor said, "Yeah, absolutely."

Watch the video HERE.

Thompson's July 24 pledge in Houston makes him the sixth Republican presidential candidate committed to signing legislation that would replace all current federal taxes with a 23 percent retail sales tax. The federal taxes swept away include all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes.

In order to offset the impact this new tax would have on American households languishing in poverty, the legislation offers a monthly "prebate."

The size of a household's "prebate" is calculated by multiplying 23 percent -- the size of the new tax -- against the government-established poverty level for a household of that size.

Based on the 2007 federal poverty level, an adult with no children would receive an annual prebate of $2,348 (which would come in monthly checks of $196). A married couple with two children would receive an annual prebate of $6,297 which would come in monthly checks of $525.

Six Republican '08ers Have Agreed to Sign 'Fair Tax' If Passed

Fair Tax supporters opted for the "prebate" system, which would flow even to the richest Americans, rather than exempting certain staples of life, hoping to protect the new sales tax from the kinds of lobbying-induced loopholes that pervade the current system.

The five other Republican presidential candidates who have pledged to sign the Fair Tax bill into law if passed by Congress are Sen. John McCain, R-Ariz., former Wisconsin Gov. Tommy Thompson, Rep. Tom Tancredo, R-Colo., Rep. Duncan Hunter, R-Calif., and former Arkansas Gov. Mike Huckabee.

So many Republican candidates have agreed to sign the Fair Tax bill because the group which is urging its passage, FairTax.org, has proven adept at using its supporters  which total a quarter of a million -- to bird-dog presidential candidates. Thompson made his pledge when a group of Fair Tax supporters showed up at an airport hangar in Houstonand the group's controller, Doug Ripley, asked him about the tax overhaul measure.

"We try to keep constant pressure on them," David Polyansky, FairTax.org's chief operating officer, told ABC News.

Polyansky identified Huckabee as the candidate who has gone furthest in his support of the initiative, not just agreeing to sign the "Fair Tax" bill if passed by Congress, but making it a core component of his 2008 campaign platform.

Giuliani and Romney Have Not Signed On

Despite FairTax.org's success within the GOP candidate pool, they have not been able to secure commitments from either the party's national front-runner or the candidate leading in the crucial states of Iowa and New Hampshire.

The Republican presidential candidate who has been most outspoken in expressing objections to the proposal is former New York Mayor Rudy Giuliani, the party's front-runner in national polls.

Asked if he would sign the Fair Tax bill, Giuliani said, "I don't think so. I don't think so. I'll have to study it some more. I don't think a fair tax is realistic change for America. Our economy is so dependent upon the way our tax system is operated the best thing to do is to simplify that tax system."

Watch the video HERE.

A second top Republican -- former Massachusetts Gov. Mitt Romney -- has also refrained from pledging to sign the Fair Tax bill.

"That's too much of a hypothetical, since you'd have to know the specifics of the legislation," Romney spokesman Kevin Madden told ABC News. "The governor has said that the Fair Tax idea has attractive characteristics, but it is not part of his tax reform platform. Romney believes in a simpler, less burdensome tax system. He wants to reduce the tax burden placed on Americans, encourage economic growth and simplify the tax system."

Fair Tax supporters have also not been successful in making inroads among Democratic presidential candidates. Among the Democratic White House hopefuls, only the longest of long shots  former Alaska Sen. Mike Gravel  has agreed to sign the Fair Tax bill if passed by Congress.

Questions Emerge About Fair Tax Feasibility

Even though the Fair Tax is marketed as "revenue neutral," liberal tax policy experts have substantial questions as to whether a 23 percent retail sales tax on its own would adequately cover the current cost of government.

"Even before looking at the distributional analysis, there is this big problem that it would leave the basic job of government undone because it would not raise the revenue," said Aviva Aron-Dine, a policy analyst with the liberal Center on Budget and Policy Priorities. "That said [if you did set the tax rate high enough to cover the current cost of government] you would be shifting the tax burden from people at the top of the income scale to people in the middle."

No comments: