Ross Kaminsky’s ridiculous article about the FairTax

A ridiculous article about the FairTax by Ross Kaminsky has recently been published in the by-now-utterly-discredited American Spectator magazine.

This article is utter garbage, written of course by the already utterly discredited Ross Kaminsky. The only excuse that can be made for him is that other idiots (such as James Antle, Quin Hillyer, and Aaron Goldstein) have already irrevocably and utterly discredited AmSpec, so Kaminsky cannot discredit AmSpec any further. Nonetheless, this article is BS.

I shall first discuss the FairTax, and then Herman Cain’s policy on the FairTax.

Here’s THE TRUTH about the FairTax Act (which Kaminsky either knows nothing about or is deliberately lying about):

1) The FairTax is NOT a VAT. It’s a proposed national sales tax, which would be levied only at the retail store level, and only on new goods. VAT is levied at all stages of the manufacturing/retail chain.

2) The FairTax DOES NOT, repeat, DOES NOT contain any deductions, credits, or exemptions for anyone and DOES have different rates for different products. Its rate is the same for all products: 23%. Anything other than that is not the FairTax and should not be called the FairTax.

3) The FairTax Act (H.R. 25) contains a provision which says explicitly that if the 16th Amendment is not repealed within 7 years after the FairTax is signed into law, the FairTax Act sunsets AUTOMATICALLY.

4) The FairTax Act would replace (and not coexist with) ALL, repeat, ALL current federal taxes – from the CGT to the gasoline tax.

5) The FairTax would NOT create a black market, because under the FT, prices would stay roughly the same as they are today. The current hidden taxes embedded in the price of everything Americans buy would be replaced by this transparent tax, which would show the American people exactly how much they pay in federal taxes.

6) This would lead the American people to DEMAND lower taxes and lower spending.

7) The FairTax would tax those who currently work illegally and don’t pay taxes – prostitutes, drug dealers, and illegal aliens.

8) Credible economic analysis has shown that the FairTax would produce an economic boom and bring back $1 trillion that’s currently parked offshore back to the US.

9) Here’s a tricky question that, by itself, debunks this entire litany of lies written by Kaminsky: if the FairTax would really allow politicians to greatly increase taxes on the American people and to use double taxation, WHY ON EARTH HAVEN’T THEY PASSED IT ALREADY? If it was the case, I’m sure the RINOs and the Dems on Capitol Hill would’ve already teamed up to get it passed quickly and send it to Obama for his signature. They never miss an opportunity to raise taxes on the American people, so why would RINOs and Democrats oppose the FairTax? Because it’s nothing of the sort that Kaminsky claims it is.

As for Herman Cain’s policy on the FairTax, it needs to be underlined that HE NO LONGER SUPPORTS THE FAIRTAX. Why? I don’t know. I guess some Establishment Republicans have visited him and have used some scare tactic on him. Maybe they’ve threatened to have the GOP’s whale donors withhold donations to Cain unless he would back off the FairTax. Maybe they’ve used some other scare tactic on him. Whichever, it’s clear that they’ve managed to scare Cain so badly that he has dumped the FairTax.

If Cain had steel for a spine, instead of a limp noodle, he would’ve continued to support the FairTax. But he no longer does. He now promotes the 9-9-9 plan (i.e. double taxation) as his solution, not the FairTax.

His supporters claim that for him the 9-9-9 plan is only a “transitional step”. Kaminsky seems to have bought this lie, for whatever reason. But Cain means it as a FINAL step, not a transitional step. He no longer mentions the FairTax in any debates or interviews. He mentioned it twice during the first debate, but since the second debate, he has NEVER even ALLUDED to the FairTax during any debate or interview, while explaining his 9-9-9 plan in detail many times. During the last debate, Herman Cain never even ALLUDED to the FairTax and continued to promote his 9-9-9 plan, while Gary Johnson mentioned it twice and defended it as fair.

His supporters claim that he doesn’t have enough time during debates to even mention the FairTax.

But that’s garbage. If Ron Paul can badmouth America’s foreign policy and its honorable military in every answer he gives, regardless of what question is he answering, then surely Cain can find at least 2 seconds during each debate to utter the phrase “Fair Tax”.

Like I said, Herman Cain no longer supports the FairTax.

Last, but not least, I’d like to note that this is by far the most ridiculous, pathetic, and idiotic article I’ve ever seen published on AmSpec. It’s even dumber than Antle’s anti-defense screeds. AmSpec should remove this article quickly and sever its ties to Ross Kaminsky.


One thought on “Ross Kaminsky’s ridiculous article about the FairTax”

  1. zbig,

    I haven’t been able to find Kaminski’s article, but your response is also filled with Fairtax misstatements.

    (1) A VAT and a national sales tax are nearly identical. Each would collect the same amount of revenue at the same rate. The difference is that a VAT gets collected in small increments at each stage of production, while a sales tax gets collected all at once at the retail cash register. The self policing nature of the VAT collection process is the reason that a VAT has significantly lower evasion potential.

    (2) I think you meant to say that the Fairtax does NOT have different rates for different products? In addition, the Fairtax does exempt certain education expenses. The “camel’s nose is under the tent flap”, and there would be nothing to prevent a Senator from proposing housing, medical, or food exemptions or anything else he thought was just as important as education.

    (3) Correct!

    (4) I don’t believe that the Fairtax replaces excise taxes as you suggest.

    (5) You are dead wrong here and need to better understand the “free lunch” Fairtax myth. Jorgenson’s embedded tax study did conclude that embedded taxes average 22%. But, he assumed that all of us would give up our withheld amounts from pay/pensions in order to achieve maximum business cost reduction. That isn’t going to happen for legal, contractual and fairness reasons. Surely you agree that we are going to take home 100% of our pay/pensions? In that case, based on 2007 actual data, business related tax costs, including income tax, payroll contributions, and compliance costs average 10%. Remove 10% in tax costs and add the 30% sales tax and retail prices rise by 17% on average. Add a 6% State sales tax and you will soon discover massive black market activities. And, transparency is another myth. The Fairtax taxes State/Local government operations, and the States would have to raise all their taxes to pay the tab. 10-15% of the federal revenue would be hidden in higher S/L taxes. How transparent is that?

    (6) Or, alternatively, seek out the black market?

    I agree with you about Cain. He is just the latest to ditch the Fairtax in favor of his own dumb plan.

    Stay tuned!

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