The FairTax Makes a Comeback

Republican senator David Perdue of Georgia sounds an awful lot like President Obama when he describes his plan to overhaul the tax code, which would repeal federal taxes and replace them with a consumption tax known as the “FairTax.”

“[The FairTax] really levels the playing field in that regardless of who you are, where you are, you’ll pay your fair share, and it will be the same amount,” Perdue tells NRO. “It will be equitable.”

Perdue couches his description of the FairTax in rhetorical terms — “levels the playing field,” “pay your fair share,” “equitable” — that could’ve come straight out of Obama’s State of the Union address, and that’s no accident. Whatever the political prospects of the proposal — it has failed over and over again when proposed in the past, and it is expected to meet a similar fate this time around — it could allow the GOP to seize the mantle of economic populism from the Democrats, and, in so doing, to “win” tax reform in the eyes of voters. That’s important, because tax-reform legislation is one of the few big, ostensibly bipartisan efforts the new Congress is expected to undertake, and the scramble to take credit for it ahead of the 2016 presidential election will be fierce.

The FairTax legislation put forward in the Senate by Perdue, his fellow Georgia Republican Johnny Isakson, and their colleague Jerry Moran (R., Kan.), was written with 2016 in mind. Perdue says that on Tuesday, before listening to Obama announce his desire to raise taxes once again, he and Isakson discussed the importance of their work in influencing the debate on tax reform. Perdue — the successful manager known for his ability to turn around businesses and revive brands – says he hopes to help move 2016 GOP presidential candidates in the direction of the FairTax.

The proposal itself is relatively simple: It would eliminate all federal income, payroll, gift, and estate taxes, and replace them with a 23 percent national sales tax. In addition to making the U.S. economy more competitive on a global scale and putting people back to work, the plan would strip the IRS of its ability to interfere in the lives of ordinary Americans, according to the conservative freshman from Georgia. Other longtime proponents of the idea agree, and argue that by replacing a system that taxes an individual’s earnings with one that exclusively taxes that same individual’s spending, it would allow each citizen the freedom to determine his own tax burden.

Perdue’s hopes for 2016 notwithstanding, the FairTax has not been a winning issue in past Republican presidential primaries. A number of GOP primary candidates, from Mike Huckabee in 2008 to Herman Cain in 2012, have failed to win the nomination while championing the proposal. And it will still be a loser come 2016, says Ryan Ellis, the  tax-policy director at Grover Norquist’s Americans for Tax Reform. “If this thing [the FairTax] was going to catch on as the next great hot thing, it would have,” Ellis says. “It’s not a practical tax-reform plan for governing, it’s something that people wish, aspirationally, they could put out there.”  

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