Dem ads against GOP not accurate on crux of FairTax proposal

Dem ads against GOP not accurate on crux of FairTax proposal

Jay Heflin
TheHill.com
Oct. 17, 2010

Democratic lawmakers struggling to find support from a skeptical electorate are using a Republican tactic to win votes by claiming their opponents will raise taxes if elected into office.

Sen. Blanche Lincoln (D-Ark.) is just one of several Democratic candidates saying the FairTax -- a levy that replaces the federal income tax with a 23 percent sales tax on everything, including the purchase of a new home or car – is backed by Republicans and will bust family budgets if enacted into law.

Research supplied by FairTax.org shows that Democrats in 16 districts have run at least 31 ads blasting Republicans for supporting the tax. But many of these ads neglect to mention the levy is essentially a national sales tax that would replace the current federal tax system.

FactCheck.org recently slammed the Democratic Congressional Campaign Committee (DCCC) for running ads that omitted this fact.

“Democrats are accusing Republicans of supporting a 23 percent sales tax on everything, which would be on top of all existing taxes… it’s misrepresenting by omission of the FairTax idea,” FactCheck.org director Brooks Jackson told The Hill.

“When people try to sell it on false evidence we step in,” he added.

The DCCC recently pulled a FairTax ad in Michigan’s 1st District because it didn’t provide the full story on the tax. DCCC spokesman Ryan Rudominer said they would not include details of the tax in future ads.

“What Republican candidates don’t want you to know is that if they had their way, they’d slap middle class families with a twenty-three percent national sales tax-hike on almost everything you buy – cars, clothes, groceries, even medicine,” he said, adding the tax is “simply wrong for middle class families and Republicans shouldn’t be surprised when it’s rejected in November.”

The ad ran on behalf of Democrat Gary McDowell, who faces tea partier Dan Benishek in November’s election.

“It’s very deceptive,” Philip Hinson, national spokesman for FairTax.org, said of the ad.

“It just speaks to the desperation of the Democratic Party because they see an absolute tsunami developing and they can’t come up with anything better than this,” he added.

The FairTax replaces income and payroll taxes with a national sales tax that would likely be collected at the state level. It also provides a rebate for incomes that are below the poverty line.

The tax is extremely popular with the Tea Party movement, according to a recent poll by the Tea Party Patriots. The tax received an extremely high rating, beating out other tax proposals, like the flat tax, as well non-tax issues like the balanced budget amendment and term limits.

However, Jim Nunns, senior fellow at the Tax Policy Center, said factors like noncompliance and including government purchases in the tax could make it hard to implement the levy.

“If we wanted to get all of our revenue from a consumption-type tax, administratively, it’s probably much better to form a VAT [Value-Added Tax] or some variant of a VAT rather than a retail sales tax,” he told The Hill.

According to several sources, talks are under way on Capitol Hill to create a consumption tax, perhaps a VAT, that would be added to the current tax system to help the country get out of debt. There has been no serious discussion on implementing the FairTax, these sources said.