GREAT HEROES OF FISCAL RESPONSIBILITY, PART XVIII

I spotted this tweet yesterday:

Sign the #Repeal16 petition!--> http://t.co/sKDJQlR237 #tcot #teaparty

— Tea Party Patriots (@TPPatriots) May 9, 2014

The Repeal16 petition, I leared at the Tea Party Patriots site, calls for the repeal of the Sixteenth Amendment. This crusade has a congressional champion:

... WHEREAS, Congressman Jim Bridenstine (R-OK) has introduced a bill in the House Representatives to permanently repeal this disaster and end this oppression.

THEREFORE, I hereby demand that you immediately and completely approve HJ Res 104 without delay, thereby relieving the American people from the oppressive burden of the federal income tax and the Internal Revenue Service!

The petition says that the income tax violates the Fifth Amendment (allegedly it deprives citizens of life, liberty and property without due process of law). On his own congressional website, Oklahoma's Jim Bridenstine tells us that the income tax violates another amendment:

Bridenstine commented, "The 4th Amendment to the US Constitution guarantees 'The right of people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures.' The 16th Amendment effectively negates the 4th Amendment. The 16th Amendment should be repealed and the IRS should be eliminated."

So Bridenstine wants to eliminate the income tax and the IRS completely. (The text of the amendment says that after two years, "the Congress shall have no power to lay and collect taxes on incomes, from whatever source derived, except in time of war declared by the Congress.") Wow, he must believe in really, really small government -- right?

Or maybe not, because -- by coincidence -- yesterday I heard this story on NPR:

ROBERT SIEGEL, HOST:

The Pentagon has to cut its budget next year. It'll start spending a lot - about half a trillion dollars still. But that's $30 billion below this year's levels. And it turns out the Pentagon and the Congress have very different ideas about what should be cut. NPR's David Welna reports on a budget battle where parochial interests often prevail.

... WELNA: ... The blueprint [House Armed Services Committee chairman Buck] McKeon presented his committee took more than $5 billion that the Pentagon wanted to cut and put it back in the budget. The committee came up with its own cuts. Crucial readiness funding got the ax, while costly weapons programs were spared or expanded. But there was more. Oklahoma Republican Jim Bridenstine's district is home to 28 AWACS surveillance planes. He was not happy that seven were being cut, along with the Air Force reserve unit that flies them. So he tried saving three of them along with the reserve unit.

REPRESENTATIVE JIM BRIDENSTINE: This is critically important, not for any parochial interest, this is critically important for us to be able to defend the United States of America. The parochial interest here is the United States of America.

WELNA: Bridenstine said the $40 million cost of keeping the planes flying could be offset by cutting funding for the planes' spare parts....

The amendment to spare Bridenstine's AWACS planes and reserve unit passed.

There's your great fiscal steward, the guy who wants to eliminate the income tax that pays for all this.

****

Now, Bridenstine does appear to recognize that we'd need to replace the income tax with something. He's endorsed the Fair Tax, which is a national sales tax. His endorsement appears on the website of FairTax.org.

FairTax.org says that the proper level for the Fair Tax is 23%. This is meant to replace not just the national income tax for individuals and businesses, but also capital gains taxes, Social Security taxes, and Medicare taxes.

The problem is, that's an unrealistically low rate:

The Institute on Taxation and Economic Policy estimates that the rate would have to be between 45 to 53 percent to raise as much as the income taxes, payroll tax, estate tax and so forth.

Oh, and guess who wins and who loses?

What's more, ITEP found that the change would be highly regressive, despite the fair tax's inclusion of a lump-sum payment to all households, which is meant to cover the cost of taxes on basic goods such as rent or food. ITEP found that the bottom 80 percent of earners would pay an average of $3,200 more in taxes, or a 51 percent bump. The top 1 percent would see an average tax cut of $225,000.

In order to get a tax rate even close to what supporters say it should be -- say, 30% -- you'd have to impose this double-digit sales tax on all sorts of purchases that aren't taxed this way now:

* Purchases of new homes
* Rent
* Interest on credit cards, mortgages and car loans
* Doctor bills
* Utilities
* Gasoline (30 percent in addition to current taxes, which would not be repealed)
* Legal fees

At today's prices, gasoline would cost almost $1 per gallon more. A $150,000 new home would run $195,000 – plus the 30 percent tax that the buyer would pay on the interest on the mortgage. In short, the FairTax taxes everything that one buys, with the one notable exception of education. Any exceptions to the tax base (for instance, eliminating rent or credit card interest from the tax base) would require an offsetting increase in the rate.

Even the Pentagon would have to pay sales tax when it buys a tank (or an AWACS plane for Bridenstine's district.

There you have it, folks: the party of fiscal responsibility.