Humbug Square - Fair tax a sham
Libertarian candidate blasts Boortz/Linder plan
My ex-father-in-law first told me about Neal Boortz back in 1969. God knows, I was an unlikely listener. I had been a fervent backer of liberals Gene McCarthy and Bobby Kennedy in the crazy election year of 1968. But I tuned to Boortz on WRNG, a little AM station that was barely more powerful than citizens band. He was brash and original and funny.
His bread and butter was bashing liberals. But he especially cracked me up when he talked about his hatred of cats. Years later, I looked at Boortz's web page and to my surprise saw a picture of Coco, his ratty, trembling Chihuahua-type dog.
I would've thought Boortz, with his Germanic genes and arrogant bluster, would own a snarling Doberman.
In the old days, Boortz was bashing the mainstream. He was an outsider. Now, of course, a mere 18 percent of Americans identify themselves as liberal. Liberals are in charge of precisely nothing. Boortz has made a fortune demonizing a dead horse.
Today, he's an insider. He claims to be a Libertarian, but he's actually a cheerleader for the ruling right-wing Republican elite. He's a megaphone for the Bush administration's relentless dishonesty about Iraq.
He used to bash closed-minded fundamentalists, but recently jumped to the defense of shady evangelical Ralph Reed.
Boortz has been remarkably successful in his climb to the top. He left WRNG to join WGST-AM (640) and then was lured away by the big bucks to Cox Radio.
Like Rush Limbaugh and Sean Hannity, he's a loudmouth and a bully and immensely sure of himself, particularly when he's wrong. He's precisely the type of blowhard media hero America has celebrated for the past decade or so.
Boortz, Limbaugh and Hannity are among the most influential commentators and writers in the country. They protect themselves by saying they're "entertainers." But they play an outsized role in the political process with their steady drumbeat of Republican propaganda and their vicious attacks against anyone who dares to disagree with their party line.
Boortz has become the biggest media star in Atlanta since the late Lewis Grizzard wrote his column for the Atlanta Journal-Constitution.
Now he's moved even more prominently into the national spotlight. He has the No. 1 nonfiction book in the country, The Fair Tax Book, co-authored by Republican Congressman John Linder. Like a bald-headed Beatle, Boortz is being swamped by fans as he barnstorms America on a book tour.
THE FAIR TAX sounds like a dream come true: a simple formula for abolishing the Internal Revenue Service and replacing our hopelessly complicated tax system with a national sales tax on virtually all goods and services.
It goes without saying that, with Boortz involved, the fair tax will make the rich richer. But what about the rest of the plan? When something sounds too good to be true, especially coming from an "entertainer" like Boortz, I look to an expert for an explanation. So, I talked with a local attorney who specializes in employee benefits, taxation and corporate law, and who has done considerable research into the issue.
His name is Allen Buckley. Like Boortz, Buckley's a Libertarian. In fact, he was the Georgia Libertarian Party's nominee for U.S. Senate last year.
Buckley says the fair tax is a sham. Last week, he called Boortz to discuss the fair tax on the air.
Boortz hung up on him.
To give you some idea of just how dishonest Boortz and Linder are, let me turn first to a basic part of the pitch they make for the fair tax. They write that "consumers will pay an embedded personal consumption tax in the amount of 23 percent on all goods and services sold at the retail level."
This is sleight of hand. And it should tell you, up front, that you are being gulled by the authors.
The tax is not 23 percent, Buckley explains. It's 30 percent.
Let's say I buy a $1 sombrero at Junkman's Daughter. With the fair tax, it would cost me $1.30 with tax, rounded off. In anybody's book, that's a 30 percent tax.
Not in the Boortz/Linder book.
Buckley notes that the authors turn 30 percent into 23 percent by using a figure that is "gross of the tax" — in other words, once added to the $1 purchase price, the 30 cents then represents only 23 percent of the $1.30 total.
Every time I've ever computed a sales tax, I've added the tax to the purchase price. Boortz's math belongs in Alice in Wonderland, not The Fair Tax Book.
Boortz and Linder have protected themselves in the book by saying, "What's at stake here is the mathematical equivalent of a game of semantics."
Yes, that's true. Boortz and Linder are playing a game of semantics. That's entertainment!
And deception. Other parts of the book simply rely on bad faith and bad math. The authors claim that the fair tax would raise as much money as the current tax system.
No, it won't, Buckley says.
Not at 30 percent. In an essay on the fair tax posted on my colleague John Sugg's blog, Buckley notes that the former head of Congress' Joint Committee on Taxation has said the rate under the fair tax would need to be 59.5 percent for the first five years and then 57 percent after tax revenues to be "revenue neutral" to 1999 revenue.
Boortz and linder go on to argue that the fair tax would solve such problems as tax evasion.
Wrong again, says Buckley, who quotes the same congressional committee as suggesting that tax evasion soars when sales tax rates exceed 10 percent.
Tax evasion under the fair tax could get so bad that a black market would develop. People would cut deals under the table inside the country, or buy things from outside the country and smuggle them in.
Let's say you added 30 percent or 57 percent to the price of a prescription drug like Viagra. Will the old man who needs the drug go to CVS and cough up the full taxed price or, if he's as frugal and dishonest as he is horny, will he find a way to get it from Canada?
But gosh, that suggests people might be dishonest under the fair tax! Who's going to criticize them? Boortz?
What does he care? He's an "entertainer." And Americans love to be entertained. They don't pay a bit of attention to a serious guy like Buckley, an earnest, well-educated and thoughtful man who has tried to get involved in public service. But he's not in the entertainment business. He writes long and well-documented arguments, not bumper-sticker quips like Boortz does. Buckley doesn't communicate in the snappy way Americans communicate today.
He's a well-meaning guy crying in the wilderness. He wants to debate Boortz, who has now become the nation's most popular expert on tax policy. Buckley even had the guts to call Boortz's show, which is like climbing into the ring with a professional wrestler.
And Boortz hung up on him, the way he would brush off a flea that was bothering dear little Coco at home in the Buckhead condo, where Mrs. Boortz balances the checkbook because Boortz can't do it himself.
Allen Buckley's essay on the Fair Tax is posted at www.johnsugg.com/2005/08/the_fair_tax_wo.html. You can contact Senior Editor Doug Monroe at doug.monroe@creativeloafing.com.