At its national convention in Honolulu, Hawaii on January 14, the American Farm Bureau Federation (AFBF) moved to make replacing the federal income and payroll tax systems a priority concern for 2004.
The AFBF board named HR 25 and S 1493, commonly known as the FairTax legislation, among its top priorities for education and lobbying efforts by its five million members. The legislation, currently pending in Congress, would replace income and payroll taxes with a national retail sales tax.
“The FairTax has been in our policy book for years,” stated AFBF President Bob Stallman. “It does address many of our policy issues on federal tax reform, including estate taxes, capital gains, alternative minimum, and more. With this vote of the board, we’ll be taking a good look at how the FairTax proposal compares to our current tax system and our desire for needed reforms.”
During the AFBF convention, FairTax advocate Tom Wright, who is executive director of FairTax.org, campaigned for farmer and rancher support of the House and Senate measures, which are already gaining support on Capitol Hill. FairTax.org has spent the past year working with more than 30 state farm bureau organizations in a coordinated, nationwide effort to raise awareness among farm bureau leadership of the bill’s details, laying the groundwork for the AFBF board’s policy vote.
“Internationally, income and payroll taxes and the cost of compliance burden our farm exports, making them less competitive on the world market,” Wright told farmers in a speech hosted by Budget & Tax News. “Domestically, the current system targets our working poor for abuse, while burdening them with regressive Social Security taxes. The FairTax improves export competitiveness across the board–not just for agriculture–while relieving the burden on our working poor and creating much needed jobs.”
According to Wright, the FairTax proposal is designed to be “revenue neutral,” raising the same amount of revenue as do personal and corporate income taxes, payroll and Social Security taxes, and gift and estate taxes. Those taxes would replaced with a system 90 percent smaller, less intrusive, and less expensive. A dedicated income stream from the broad-based sales tax would replace the narrow, regressive payroll tax currently used to fund Social Security and Medicare.
The FairTax measure would take farm and ranch producers “out of the tax system entirely,” said Wright, as long as their operations are not involved in retail sales.
“With the FairTax, farmers are out of the tax business entirely,” continued Wright. “No record keeping, no filing, no complex planning, no audits, no alternative minimum tax, no self-employment taxes, nothing. The only place the tax is charged is ‘under the bright lights of the retail counter’ to the person who’s going to wear the gloves or drive the car. There are no hidden taxes cascading through the system. Producers will make business decisions based solely on what is best for their farm and family, not tax consequences.”
The FairTax measure is sponsored in the House by Reps. John Linder (R-Georgia) and Colin Peterson (D-Minnesota), and in the Senate by Sens. Saxby Chambliss (R-Georgia) and Zell Miller (D-Georgia).
Roger W. Buchholtz is Michigan’s state director for FairTax.org and president and founder of Orient American Ore Company. His email address is [email protected], or he can be reached by telephone at 269/345-0950.