Sen. Jerry Moran said he thinks now is the best opportunity conservatives have ever had to abolish income taxes in favor of funding government with sales taxes because of an IRS political scandal and data security breaches at the agency.
And Rep. Lynn Jenkins said the federal tax code is “three times the size of the Bible, with no good news.”
The two Republican federal lawmakers from Kansas headlined a rally Tuesday in Wichita stumping for “Fair Tax,” a national campaign to do away with income and wealth-based taxes and replace them with taxes on consumption.
About 200 people attended the meeting at the Wichita State University Metropolitan Complex. By a show of hands, almost all indicated they favor the “Fair Tax” concept, and questions were mostly focused on tactics for passing it in Washington.
Activists at the entrance offered T-shirts for donations, the shirts reading “Taxing Income is Stealing.”
The “Fair Tax” proposal would abolish personal and corporate federal income taxes and phase out the IRS. It would also do away with gift, estate, capital gains, alternative minimum, Social Security, Medicare and self-employment taxes.
The “Fair Tax” plan would replace those taxes with a 23 percent sales tax on new goods and services, which supporters say would raise about the same amount of money as the current tax code. Taxpayers would get a sales tax “prebate” on spending up to the poverty level.
The concept is similar to Kansas Gov. Sam Brownback’s “Glide Path to Zero” tax plan, which envisions eliminating state income taxes and funding government primarily through sales and consumption taxes.
Moran, one of two primary sponsors of the “Fair Tax” proposal in the Senate, said he thinks the current tax code is terrible.
“It’s broken, and it needs to be fixed,” he said.
He said the long-simmering scandal around alleged IRS targeting of conservative political activist groups and new revelations of hackers stealing personal data from the agency open a door to abolishing the IRS.
“I’ve reached the conclusion this is the best opportunity we’ve had to have a fairer tax code that restores freedom and liberty to the American people,” Moran said.
He noted that Congress couldn’t levy an income tax before passage of the 16th Amendment in 1913 and that the country had survived without an income tax longer than it has with one.
Asked whether he wants to repeal the 16th Amendment, Moran responded: “I guess it’s important for me to state I am not for a consumption tax that is in addition to the income tax we have today.”
Jenkins conceded that passing the “Fair Tax” plan is “a long way off.”
“It’s been hard to get the 70 co-sponsors we have now,” she said, adding that it would take 218 votes to pass.
Asked about the chance of getting House Speaker John Boehner to bring the “Fair Tax” proposal to a floor vote, Jenkins replied: “We don’t really care what House leadership thinks anymore.”
She said about 60 percent of the current representatives in the House are relative newcomers with less than seven years in office and haven’t been part of previous Congresses where the speaker controlled the body by controlling earmarks and committee assignments.
“I just want you all to know I don’t work for John Boehner, he works for me,” she said.
Opponents of the “Fair Tax” plan say it’s anything but fair and would be a big benefit to the wealthy, who spend a smaller percentage of their income on taxable goods and services.
Also, opponents say the rate would have to be about 34 percent – not 23 percent – to make up for the revenue lost from abolishing the other taxes.
President Obama is on record as opposing the “Fair Tax” plan and would likely veto it if it passes the House and Senate.
“Replacing our current system with a national sales tax would produce a major increase in taxes for middle class families, while slashing taxes for the wealthiest Americans,” a White House position statement said. “Despite its name, that’s not a fair way to reform our tax system.”
“Fair Tax” advocates are hoping for a Republican win in the 2016 presidential election, which they think would help their cause.
Moran listed GOP presidential hopefuls supporting or willing to consider the “Fair Tax” plan, including Ted Cruz, Donald Trump, Carly Fiorina and Mike Huckabee.