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STEVE KING TESTIFIES FOR 'FAIR TAX'

September 28, 2006

Iowa Congressman Steve King yesterday testified in favor of the "FAIR Tax" national retail sales tax plan ($link). His testimony includes the FAIR tax advocates' deceptive claim of a 23% rate. While 23% is bad enough, it's actually a 30% rate the way we normally calculate sales tax rates. Because the elimination of the federal income tax would undermine state income taxes, every retail transaction would end up burdened with at least a 40% sales tax, and many economists think the rate would be higher than that. That's absurd.

Yet it's a great thing for a politician to advocate, because it will never happen, so he won't ever be held responsible for it.

In the interest of fairness and balance, the Tax Foundation has podcast with Lawrence Kotlikoff, a FAIR tax advocate, available here. My own thoughts on the FAIR tax are spelled out in more detail here.

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