LARRY DRUMMOND GETS A STRANGE RESPONSE FROM HIS CONGRESS MEMBER
Today’s Grassroots Corner comes from Larry Drummond of Kansas City, Missouri. Larry wrote his Congressman, Emanual Cleaver, II, who represents the Fifth Congressional District of Missouri. Larry received the following reply dated August 5, 2024. We thank Larry for taking the initiative to write his Congress member and need you to respond to Congressman Cleaver. Congressman Cleaver writes:
“Thank you for contacting my office regarding The Fair Tax Act (H.R. 25). I appreciate hearing your thoughts on this legislation.
“The Fair Tax Act would replace individual and corporate income taxes, the estate tax, and the payroll taxes dedicated to Social Security and Medicare with a national sales tax of 30%. While the Fair Tax Act includes a "family consumption allowance" that would provide families with a "prebate" designed to offset the taxes due on a baseline level of necessities, it would also eliminate the earned income and child tax credits that currently lift millions of families out of poverty. Furthermore, by shifting the foundation of the federal tax system from income to consumption, the Fair Tax Act would cut taxes for the wealthy while increasing taxes paid by low- and middle-income retirees who live off of Social Security and savings, as well as families who would be forced to pay more taxes on everyday goods and services. Meanwhile, high-income families who spend less of their income on consumption and who have enough earnings to save a substantial fraction of their income would pay a smaller share of their income in tax. This shift of the tax burden from the wealthy to working families and retirees would be exacerbated by the Fair Tax Act's repeal of the federal estate tax. This would allow the nation's wealthiest families to accumulate even greater intergenerational wealth, thereby widening our country's already sizable wealth gap.
“… . Still, I am glad that you took the time to share your thoughts with me, as this bill could be reintroduced in the next Congress.
“Thank you again for calling my office. To stay informed on events happening in Washington, D.C., and Kansas City, visit my website (cleaver.house.gov) to sign up for my electronic newsletter. Please feel free to contact me in the future regarding this or any other issue important to you.”
There are several problems with Congressman Cleaver’s response. First, note that Congressman Cleaver is a Democrat. While we are hopeful that we can reach some independent-thinking Democrats with the FAIRtax message, the party itself remains opposed to the FAIRtax. Consequently, many Democrats are still responding to the FAIRtax with their party line talking points. That appears to be the case here.
Regarding the FAIRtax eliminating the earned income and child tax credits, please see the Grassroots Corner from November 18, 2024, on the FAIRtax website under “News.” In that Grassroots Corner, I highlight problems with the Earned Income Credit, including the likely need to pay a preparer more than the benefit from the credit is worth.
He asserts that shifting taxation from income to consumption would result in lower taxes for the wealthy and higher taxes for lower and middle income earners. That’s tried and true political rhetoric, but it’s simply not factual. Billionaire Warren Buffett once famously said that he pays less income tax than his secretary. Donald Trump’s leaked tax returns show that he paid a lot less income tax than he would pay in FAIRtax. The FAIRtax also adjusts the Social Security benefit for any increase in the cost of living due to the FAIRtax.
Congressman Cleaver mentions the Prebate but dismisses its actual effect. The prebate is a 100% refund of all FAIRtax paid on spending up to the poverty level. That means a low-income family spending right at the poverty level pays nothing, zero, zip, zilch, nada in FAIRtax out of their own pocket.
The Congressman fails to mention that the FAIRtax eliminates the federal payroll taxes, which are among the most regressive federal taxes on the books. These taxes are levied against every dollar a worker earns. There is no standard deduction, no allowance for family size and you pay the same rate whether you make $40,000 or $4,000,000.
By eliminating the income tax and the federal withholding that comes with it, the FAIRtax ensures that everyone has more money in their pocket since Uncle Sam is no longer grabbing his cut off the top.
Regarding higher income families that spend a smaller percentage of their total income on consumption. If these families don’t spend all of their income on consumption, they save and invest that income. Banks and companies put that money to work to make products and services that benefit everyone.
Finally, repealing the federal estate tax would have a negligible effect on the wealth gap and would barely touch federal revenues. Only 0.2% of Americans’ estates paid the estate, gift, and generation-skipping tax in 2019. In 2017, less than 1% of federal revenue came from Estate, Gift, and Generation-Skipping taxes—source: Treasury.Gov – Fiscal Data. A great deal of tax planning is directed at reducing these taxes. Wealthy people could redirect those resources to more productive activity.
We thank Larry Drummond for reaching out to his Congress member, as each of us should.
Please correct Congressman Cleaver by contacting his office. You cannot communicate with the Congressman through his website, https://cleaver.house.gov/, unless you live in the Fifth Congressional District of Missouri. However, you can phone his D.C. office at (202) 225-4535 or fax (202) 225-4403. Snail mail will reach him at 411 W. Maple Avenue, Suite F, Independence MO 64050, 4001 Dr Martin Luther King Jr Blvd, Suite 210, Kansas City MO 64130, or 2217 Rayburn HOB, Washington DC 20515.
Be polite, but be specific in pointing out how the FAIRtax would be of tremendous benefit to lower income earners. Ask the Congressman to please consider the FAIRtax on its actual merits and compare how his constituents would fare under the FAIRtax vs. under the current income/payroll tax system.
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Larry Drummond’s ultimate education/employment was directed toward the profession of architecture. But when Larry was about 50, significant technological and national economic changes resulted in his working 3 1/2 years in a grocery store and 21-1/2 years in two hotels—all good learning experiences, Larry says.
Larry has been a naturalist and environmentalist for many years—with a particular interest in endangered wild bison in western states. He says he owes much to the prolific naturalist George Wuerthner.
Larry also spent much time looking for candidates who advocate fiscal responsibility, transparency, and simplicity—all strong arguments for the FAIRTAX.
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I would love to hear from you if you know someone like Larry or if you are like Larry.
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As a reminder, event insurance coverage is available, but you must let us know. Once the event is underway, it's too late. If you are planning an event, let me know the who, what, when, and where, and I will get you a certificate of insurance.
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🇺🇸 Call For Pictures & WriteUps - We need more of you to send in pictures and news. If you have something to share, please send your material to me, Jim.Bennett@FAIRtax.org, (908) 578-4975, or fax (908) 598-2888. When others see your activity, they are inspired, and the process snowballs. When the process snowballs, Congress Members, Senators, and even the President start to listen.