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FairTax still kicking

Many political observers were ready to bury U.S. Rep. John Linder's FairTax bill last fall when President Bush's tax reform commission gave the back of its hand to the proposed national sales tax.

The panel chose to recommend tweaking the current income tax system rather than such a dramatic overhaul of the way the federal government collects the revenue it needs to operate.

But the FairTax won't go away. During a raucous public rally in Gwinnett County last month in support of the legislation, Linder, R-Duluth, announced that he is being offered an opportunity to present the bill to the president and House Republican leaders.

He will meet this week with the House GOP leadership, then head to the White House on a date yet to be set - accompanied by House Speaker Dennis Hastert, R-Ill. - to outline his bill to Bush.

So much for the demise of the FairTax.

"The national sales tax is very much like Freddy,'' said University of Virginia political scientist Larry Sabato, referring to the main character in countless installments of the "Nightmare on Elm Street" horror movie series. "It just refuses to die.''

In fact, the legislation Linder introduced back in 1999 and that he has made his signature issue appears to be picking up momentum.

A capacity crowd of 4,500 jammed the Gwinnett Convention Center for last month's rally, which featured Linder, Atlanta-based syndicated radio talk show host Neal Boortz and Sean Hannity of the Fox Television Network.

"We think there were 3,000 people turned away,'' Linder said. "I was amazed.''

The event was so successful that Linder and Boortz are talking about following it up with a series of rallies. Linder said they're looking at Orlando, Fla., as the next stop.

The congressman credits "The FairTax Book'' with playing a major role in the surge of interest in abolishing the Internal Revenue Service and replacing it with a national sales tax. He and Boortz co-authored the book, which was published last August and is 14th on The New York Times Bestseller List for paperback nonfiction.

"People have wanted to replace the IRS, but they didn't have anything to replace it with,'' Linder said. "(Now,) people believe there's a system that can replace the IRS and system that's fair. The book has been a huge contributor in that.''

The book goes into detail on what it would take to enable Americans to take home their entire paychecks instead of having to pay taxes on their earnings. The tradeoff, under Linder's bill, would be a 23 percent sales tax.

To prevent the measure from becoming regressive and penalizing low-income Americans, all taxpayers would receive a "prebate'' determined through a formula based on the federal poverty level. Essentially, all purchases at or below the prebate would be tax free.

While the concept sounds good to a lot of people, Linder's bill has drawn fire from some powerful interest groups. The retail business lobby doesn't like it because of concerns that such a high sales tax rate would make people think twice about the purchases they're making and perhaps curb their buying habits.

The real estate industry also has motivation to oppose it. Any change in the current tax structure that gets rid of the mortgage interest deduction would deprive Realtors of a powerful sales tool.

The FairTax also faces competition from other proposals aimed at overhauling the current system, including the flat tax on incomes once championed on the presidential campaign trail by Republican Steve Forbes.

"The vast majority agree the tax code needs drastic revision,'' Sabato said. "The problem is nobody agrees on what the revision should be. ... There just isn't a national consensus for it or anything close to it.''

But Sabato gives Linder high marks for persistence.

"He is trying to plant the seed,'' Sabato said. "Who knows whether the seed may sprout and even flower? On the other hand, the seed may die in the ground.''

Dave Williams is a staff writer for the Gwinnett Daily Post. E-mail him at dave.williams@gwinnettdailypost.com.