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Tri-City Herald

Network aims to curb taxation


June 21, 2009 -

http://www.tri-cityherald.com -

Jun. 21--Jamie Wheeler of Kennewick is fed up with taxes.

While that phrase could describe just about anyone, Wheeler is on the front lines of a grass-roots movement to radically change the federal tax structure in a way she thinks would be more fair to everyone.

Wheeler is the state director for the Fair Tax Network, a small but growing cadre of people across the country who want to demolish the increasingly complex system of federal taxes and loopholes in favor of one tax to replace them all -- a 23 percent national retail sales tax.

The network has about 300 members in the state, and most of them within the 4th Congressional District, which spans most of Central Washington including the Tri-Cities, Wheeler said.

She hopes to draw more Tri-Citians to the network through a forum at 7:30 p.m. Thursday at the Kennewick branch, Mid-Columbia Libraries, 1620 S. Union St., Kennewick.

The forum will pit the fair tax against other tax reform proposals such as the flat tax, which would tax everyone's income at the same rate.

The overall goal is to drum up support for two pieces of legislation introduced in Congress that would make the fair tax into law.

Rep. John Linder, R-Ga., has tried for years to convince Congress to pass the Fair Tax Act, each year gaining a little more support. This year's version of H.R. 25 has 55 co-sponsors -- mostly Republican.

But the bill hasn't budged from the House Committee on Ways and Means since being referred there on Jan. 6.

A similar bill, S.296, was introduced into the Senate by Sen. Saxby Chambliss, R-Ga., and has been stalled in the Finance Committee since Jan. 22.

Sens. Patty Murray and Maria Cantwell, both D-Wash., and Reps. Doc Hastings and Cathy McMorris-Rodgers, both R-Wash., have not taken positions on the bill, according to Linder's website.

In Washington state, tax reform discussions have taken a different direction, with debate heating up over the idea of a state income tax.

Sen. Jeanne Kohl-Welles, D-Seattle, introduced a bill in the 2009 legislative session that would have created a 1 percent income tax for people earning more than $500,000, with the first $500,000 in income being exempt from taxation.

That bill died before the Legislature went home on April 27, but Senate Majority Leader Lisa Brown, D-Spokane, said in the last weeks of the session that Washington state needs to consider a high-earner income tax to make the state less reliant on sales tax.

Part of her rationale was that sales taxes are regressive, meaning they tend to hit lower-income people's pocketbooks harder. She also was concerned about the state's coffers depleting during economic downturns when people spend less money.

Wheeler said she thinks a national sales tax is more fair because it taxes consumption rather than income.

That started to make sense to her when she had to drop her part-time job because she figured out she and her husband were being taxed more being a double-income household with no dependents. Her children are grown.

Wheeler thinks it defies the American dream to tax income, because people should be encouraged to earn more rather than discouraged by being bumped up into a higher tax bracket.

She said a sales tax would be more fair because everybody would pay whenever they buy something.

"How about drug dealers?" she said. "Know any who file income tax? But they do buy things."

The only exception to the fair tax would come in the form of a "prebate" that would give qualified families a check each month basically exempting people up to the poverty level.




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FairTax Fact: The Department of Commerce reports in its most recent Economic Census that just 688 retailers (0.03%) in the U.S. make 48.6% of all the sales. Just 3.6% of retailers collectively make 85.7% of all U.S. sales. Fewer points of collection will mean higher compliance with the FairTax than with today's complex system.