Covering the nationwide Tea Parties held in various cities on Tax Day, Southern Political Report’s Tom Baxter wrote of the Atlanta event: “What it looked like most of all was a Fair Tax rally. Advocates of the national sales tax idea looked like the largest and most enthusiastic contingent in the crowd." Conservative commentator Sean Hannity agreed, pronouncing Atlanta "Fair Tax land."
And indeed it was. Watching Fox News coverage of the local tax revolts, one could not help but notice the many protesters showing support for a House bill popularly known as the “Fair Tax,” which calls for the abolishment of the IRS and the replacement of the income tax with a national sales tax.
Fair Tax supporters are particularly thick on the ground in Atlanta because that's where popular talk radio host Neal Boortz -- co-author of two books on the proposal -- broadcasts his nationally syndicated program. On the same day, a Fair Tax rally drew about 2,000 enthusiastic supporters in neighboring South Carolina, where Boortz and fellow advocate, former Arkansas Gov. Mike Huckabee, spoke. Tea parties in Columbia and Charleston also had a noticeably strong Fair Tax presence.
The Fair Tax would replace existing federal taxes -- the personal income tax, the capital gains tax, the estate tax, even payroll taxes for Social Security and Medicare -- with a 30 percent national retail sales tax on the final sale of all goods and services. As Laurence Vance of the Ludwig von Mises Institute put it in a recent lecture, "The appeal is obvious: no more complex tax code, no more taxes withheld from paychecks, no more 1040 forms, no more record keeping, no more compliance costs, no more IRS audits.”
Nevertheless, even many conservatives and libertarians have serious concerns about the workability of the Fair Tax. It would require state and local governments to pay sales taxes to Washington and the federal government to pay sales taxes to itself. Claimed prices would probably not fall by as much as Fair Tax supporters project. Worst of all, as Vance points out, "There is nothing to prevent an income tax from being reinstituted, giving us a two-headed hydra of an income tax and a consumption tax."
Despite the Fair Tax's shortcomings as policy, politically it has brought together a coalition of conservative, largely middle-class activists looking for radical solutions to big government and its most detested public symbol, the Internal Revenue Service. I've never met a Fair Tax supporter who wouldn't prefer not to be taxed at all, whether on income or consumption. Said Charleston Fair Tax activist John Steinberger of his cause, "It's a good first step." Admits Vance, an ardent Fair Tax opponent, “It is the most radical tax reform plan, bar none.”
The Fair Tax’s radicalism is key. The tea party protesters seemed to genuinely desire a radical change in the way our government conducts its business, not simply minor reforms or more business-as-usual. If sustained, this sharp right turn at the grassroots level could have a serious political impact. Republicans have been promising conservatives smaller government for decades, but delivering the exact opposite. The tea parties may have been primarily born of President Obama’s recent stimulus, but praise for the GOP at the various events was almost nonexistent.
Leading Republicans have been slow to grasp the increasing anger of conservative activists over taxes, spending, and monetary policy. In 2008, only Mike Huckabee and libertarian firebrand Ron Paul expressed qualified support for the Fair Tax, while the other Republican presidential candidates kept their distance. Mitt Romney, a favorite of many conservatives, went so far as to laugh at the idea during a radio interview in Florida.
Yet if the tea party trend showed anything, it's that the most passionate conservative activists in the country are tired of such weak tea. The Fair Tax may not be the best policy idea for reversing the federal government's explosive growth. But far from being a danger or even a distraction to the anti-government message, the Fair Tax movement is valuable precisely because it helps cultivate citizens’ willingness to consider radical changes, pushing back against resurgent big-government liberalism.
The conservative cause of reducing government and slashing spending has always been an ambitious effort. Libertarian and conservative critics of the Fair Tax must express their valid policy concerns, but without dismissing the thousands of committed activists who have been mobilized by the proposal.
Any serious challenges to the status quo will require serious challengers. And whatever the shortcomings of a national sales tax, the patriotic Americans who make up the Fair Tax movement are at least dead serious about a kind of change that small-government supporters of all stripes can believe in.