2010 - Congressional Candidate Writes About The FairTax

The November-December 2010 edition of the NJ Libertarian News included a piece by NJ District #11's Libertarian Party candidate for Congress Jim Gawron who most of you know Carol & I (& many of you who live in the district) supported in his run for Congress last fall.

For Carol & me it all started with a phone call I made to Jim's home one Saturday morning in July 2010 - he said he had heard of the FairTax but did not know much about it. He then began his own detailed & intensive study of the FairTax, including reading The FairTax Book & many pieces on ReturnToExcellence.net & called me about a month later to join the FairTax effort in NJ.

Jim met with Carol, Sandy Sherman, & me @ my home one day during his lunch hour for a FairTax briefing & it was so obvious that his knowledge of the principles taught by the Austrian school of economics would put any of his establishment Republican or Democrat opponents to shame without even mentioning the FairTax that the briefing was a mere fine tuning & hardly necessary - this is the type of candidate that America needs.

Although starting very late & running a low key campaign Mr. Gawron received 4,163 votes on November 2 - I can guarantee you that @ least 4,163 people in NJ heard about the FairTax from Jim.

Mr. Gawron attended FairTax events - the Morristown Tea Party on Labor Day & the election analysis on November 13 @ Tessa & Sandy Sherman's home re the campaigns of Mike Agosta & Anna Little.

Below is Mr. Gawron's contribution to the aforementioned Libertarian Party newsletter. I just hope he runs again in 2012 - we are running out of people of his quality.

---FairTax Newsletter By Jim Gawron---

I am a Fair Tax supporter. Quite frankly I do not think there is any one single thing that could be done to as drastically improve the economic situation in this country as adoption of HR25, "The Fair Tax."

HR25 does address which taxes it eliminates....income tax, personal withholding, Social Security withholding, & Medicare withholding...all of it...you get your entire paycheck free of federal taxes without deduction. It also eliminates all income taxation of business...we would go from the highest corporate tax rate in the world to the lowest in an eye blink....now THAT will bring businesses back to this country !

For those concerned that elimination of business taxation shifts the tax burden from companies to individuals...that is an economic fallacy, all businesses pass their taxes on to the consumers. Businesses will be suddenly freed from making business decisions due to tax consequences, which is currently one of the major components of their decision making.

Elimination of the income tax and repeal of the 16th amendment is a part of the bill....if the Amendment is not successfully repealed the Fair Tax goes away, the bill will not allow us to be back-doored into a situation where we have BOTH an income tax and a national consumption tax.

The impact it will have on personal privacy and productivity though is perhaps one of the biggest positive elements from a libertarian perspective. After enactment of the FairTax you can work as much as you want, as many jobs as you want, as much overtime as you want, and you have no need to tell the government any of it...most of the personal privacy we have lost in this country is due to the Federal Government's need to track our every productive effort. I would support the bill for that reason alone, but there are many many others.

It also strips Congress of much of its power. Much lobbying and deal making goes on in order to gain businesses and industries favorable tax treatment. Congress grants most of its favors either by doling money out, or doling tax breaks....one half of that equation will be forever broken.

Most of those in power now despise it, and that should tell most of what you need to know. - Jim Gawron

Responses - AAPS - All For The Patient

Due to technical problems @ Google in sending subscription messages earlier in the week I repeat the message of January 24 below for the benefit of anyone who may not have received it.

----- Original Message Of January 24-----

Below are two responses that add to the original discussion from last night's message. The first message discusses the AMA's money making ability. Although the AMA has operated in the black the past ten years while membership has decreased over the decade the financial results are due to spending restraints that any business would undergo in times of financial stress. We just have to do our part to keep the stress up.

---Response #1---

The AMA was initially against Obamacare. The main source of income for the AMA is the monopoly they hold on coding numbers that we are all forced to use ( I have heard estimates of 75% of the AMA annual income). When Obamacare became aware of the AMA position, discussion was held about using alternative coding sources and the AMA secured their continued income with a change of heart for Obamacare and are now in favor of it. Amazing!! And the AMA claims they stand behind what is good for the people. Interesting little tidbit. Keep up the good work.


---Response #2---

Reading your post and the worry of BO's reelection - out of 2,000 pages of the health bill I hear only four points that are always used. If that is all the Republicans have for negotiation they need someone who can decipher the rest of the bill.

Heritage Foundation's Economic Freedom Index Omits Major Point The FairTax Would Correct

Many of you saw the Heritage Foundation's 2011 Index of Economic Freedom's annual rating of the freest countries (economies) in the world & were dismayed to find the USA had slipped again this year barely hanging in the top ten - let alone not being #1. Hong Kong (not a separate country but a part of the People's Republic of China) remains #1 for the 15th straight year & Canada, thanks to the USA's decline, is embarrassingly the freest country in North America. The top four economies are all part of the Asian sphere of influence.

The ratings are based on countries' commitment to capitalistic systems by measuring the following categories of economic freedom: fiscal soundness & openness to trade & investment, government size, business & labor regulations, property rights, corruption, monetary stability, & financial competition. Per capita GDP is measured in another survey.

James Jameson presents a major point omitted from the Heritage Foundation's ratings when he writes:

"For all of its methodological strength, the Index of Economic Freedom entirely leaves out one of the most treasured individual freedoms—the freedom to migrate out of one's own country without undue interference from government. As long as a person has remained current on tax payments, the ability to leave a nation to establish citizenship elsewhere should be a sacrosanct human right. As Article 13 of the Universal Declaration of Human Rights states: 'Everyone has the right to leave any country, even his own.'

In the U.S., the economic penalty for permanent expatriation is so severe that it is unduly burdensome to exercise the 'right to emigrate.' If the Index were to account for this freedom (or lack thereof), there is no doubt that our country would finish even further down the list.

Under U.S. tax law, a citizen who wishes to renounce his citizenship must pay a mark-to-market exit tax. This tax treats all assets in excess of $600,000 as if they had been sold, and thus liable for immediate payment of capital gains taxes. There is also a 10-year reporting requirement to the IRS, post expatriation.

Adding this metric would enhance an otherwise interesting set of measurements on economic freedom. It would also further demonstrate our eroding economic freedom."

Below is an excellent letter from a subscriber to ReturnToExcellence.net that shows how the FairTax would eliminate this further erosion of our freedoms. The letter ends with what I call "the principle of the opposite," namely always look @ the exact opposite of what you plan or expect because @ least half the time that will happen.

---Letter Addressing James Jameson Economic Freedom Concern---

Mr. Jameson's letter describing how the code shackles our citizens who seek to leave the country exemplifies the plenary and overreaching nature of income and estate taxes - and it buffs the FairTax.

Mr. Jameson describes the "Liz Taylor" amendment. When Liz returned to the United Kingdom and renounced her U.S. Citizenship, the IRS said "not so fast!" The IRS then created a presumption that, anyone exercising his or her Article-13 Universal Human Right to leave his or her country does so for the purpose of avoiding taxes. The presumption pursues the refugee for ten years.

This presumption is, candidly, presumptuous. It is not shared by civilized countries. Germany, for example, ascribes unlimited income tax liability only to natural persons who have their residences or usual places of abode in country. EStG, Sec. 1. Others are ascribed an income tax liability that is limited to income from German sources. Citizenship plays no role.

Under the American income and estate tax regime, citizenship plays a significant role. The tax tentacles extend to American expats who maintain no residence in the United States. In a generous whim, Congress allows expats to exclude $91,500 in foreign "earned income," as long as that income pushes remaining income into the higher tax brackets. There is also a credit for taxes paid to a foreign country, but only to the extent of U.S. tax on the same income.

The expat gets the worst of both tax worlds. The U.S. citizen living in Germany, for example, who owns tax-free U.S. munis pays tax on the income in Germany. That same person who wins 1 million Euros in the South German Lottery pays no tax on those winnings to Germany but must pay them to the U.S.

The citizenship-conscious American tax spotlight that shines outward also shines inward. U.S. citizen spouses may make tax-free gifts to each other, both in life and post-mortem. But a U.S. citizen wanting to make a gift to his or her non-citizen spouse must be careful and set up a "QDOT" - a qualified domestic trust. The IRS is petrified that the non-citizen spouse will return to his or her native country, and the gift will escape taxation.

The octopus nature of our tax code is shared by only two other countries: North Korea and the Philippines. We should view the Philippines more indulgently because they had our tax code when they became independent from the United States in 1946.

Our current tax laws can represent the most fundamental abridgment of freedom and privacy. Under the FairTax, these extraterritorial laws would disappear. Perhaps the greatest irony would be that, when the American state makes it easier for its citizens to leave, more will choose to voluntarily remain.