The Grassroots Corner January 8, 2021

  • by:
  • Source: FAIRtax
  • 04/09/2021

We start the New Year with some things you may not know about our President and Board Chair, Steven L. Hayes. Steve graduated with honors from the University of Arkansas and the University of San Francisco Law School.

In the early 80’s, Steve became involved in company workouts. Workouts are efforts to help a company in financial trouble stay alive to the point where one could at least sell parts of it for more money than you could get if the company went bankrupt.

Steve was obviously very good at what he did because he kept getting referrals to help others with sick companies. Steve's work included a large ranch operation in Texas and two insurance companies. Steve persuaded creditors to either cooperate with a failing firm, and perhaps receive forty or fifty cents on the dollar, or let the company go under and get only ten cents on the dollar. Most agreed that cooperating was better.

Occasionally Steve was so successful that the ailing company was actually nursed back to health and profitability.  It was a real cork-popping event when a company headed for bankruptcy no longer needed to be broken up or sold.

Steve's efforts required a thorough understanding of tax law and gave him an appreciation for the inefficiency, opaqueness, unfairness and harmful nature of the federal tax code. As a result, Steve considers himself a "recovering tax attorney."

During the '90s, Steve got involved in tax reform, investigating alternatives to the federal income tax. Based on his research, which included interviewing tax practitioners, business owners, employees, and economists, Steve determined the best solution was to replace the income tax with a national retail sales tax collected by the states.
Steve's tax-reform activities were always pro bono (except maybe once or twice when he accepted reimbursement for travel).   They were supported by his law practice and with the agreement of his wife, Paula, a CPA, who came to detest the income tax. Up until about a year ago, Steve was traveling monthly at his own expense from his home in Florida to Washington, D.C. to meet with lawmakers on Capitol Hill and with tax-reform organizations on the Hill's periphery.

Steve helped form and became President of the non-profit Citizens for an Alternative Tax System (CATS), the first organization dedicated to replacing the income tax with a consumption tax.

There's a story of how Steve came over from CATS to our group, Americans for Fair Taxation. Steve met our former Chief Executive Officer, Leo Linbeck, in 1991 through his close Houston, Texas, friend and influential attorney, Jack Trotter. Jack arranged for Steve to address about fifty of Houston's business glitterati. Steve recalls, "It was like arguing before the Supreme Court of the United States." Just seconds into his prepared remarks, Steve was peppered with questions.

At one point, his frustration grew to the point that he exclaimed, "That's the rudest and maybe the dumbest question I’ve ever heard." The inquirer just smiled. Texans are like that. They behave that way to see if a presenter is serious. After a few more questions, Jack hustled Steve out into the hall, depositing him there and going back into the room.

Fifteen minutes later, Jack came back out and declared to Steve, "We're in!" Steve had nailed it, and the FAIRtax was off and running in Houston, led by Leo Linbeck, Jr., with all financial resources.

Leo, the consummate engineer, admonished Steve to, "Get the plans right before you build the bridge." Leo financed the studies that resulted in the plan that came to be known as the FAIRtax.  These studies established the revenue neutral rate, and determined how much of the prices of the goods and services we buy are actually costs imposed by the income tax system being passed along to us.

One objective Steve wishes he had been able to accomplish was getting Billy Tauzin on board. Billy was to become a twelve-term Member of  Congress from Louisiana's Third District and authored a book, National Retail Sales Tax: Why America Should Abolish the Federal Income Tax Code and the IRS, Claitors Pub Division, 1998.

The problem was that while both Billy and Leo agreed that the income tax had to go, they couldn’t agree on how to handle the issue of federal payroll taxes.  Leo insisted that any plan to replace the income tax had to include abolition of the payroll taxes as well.  He believed that if the payroll taxes were left in place, the majority of Americans would be reluctant to sign onto the plan.
Billy, ever the legislative strategist, thought that abolishing payroll taxes was too ambitious and would never clear Congressional hurdles. Billy never came around to the FAIRtax plan. Steve says we may have had a different movement if he could have convinced Billy to join us. Steve merged CATS with AFFT after Billy retired.

Following Leo's death in 2013, the Board of Americans for Fair Taxation handed the corporation over to the grassroots. The grassroots delegates, meeting in Houston in June of 2014, unanimously elected Steve as their President and Chair and have reelected him every time since then. Steve’s workout experience proved invaluable in the early days as we faced financial challenges. Today we are financially stable.

Steve also currently serves on the Florida FairTax® Educational Association, Inc. board of directors.

Steve has appeared on hundreds of radio and television shows, had numerous articles published in newspapers and magazines, and regularly speaks to groups all over the country. He is currently a commentator on many radio shows, not only about the FAIRtax, but about tax policy in general.

Steve has testified before the House Ways & Means Committee and former Congressman Jack Kemp's Tax Reform Committee. He is in demand as an expert on tax reform panels and forums.

Steve has learned that no path to an objective is too humble or too remote. In New Hampshire in 1992, Steve got a meeting with former Massachusetts Senator and Presidential Candidate Paul Tsongas through a friend's mother. The mother was Tsongas' hairdresser.

Steve is admitted to the bars of both Florida and California. His practice has mostly moved away from workouts to mediation.  These efforts have taken him as far away from Florida as Pisa, Italy, where he recently mediated a dispute. Steve also works in venture capital and handles real estate closings as well. Steve notes that COVID has hurt his practice because many of his clients are small businesses. Steve hopes that situation will improve soon.

Steve and his wife, Paula, live in Clearwater, Florida. Daughter, Nicole, her husband Marcus, grandson, D'Artagnan (Dart), and granddaughter, Delilah, live nearby.

Yours In the FAIRtax Movement!

Jim Bennett
AFFT Grassroots Coordinator & Secretary


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