Augusta Chronicle forwarded false claim that taxpayers would get "their entire paycheck" under "Fair Tax"

Augusta Chronicle forwarded false claim that taxpayers would get "their entire paycheck" under "Fair Tax"

››› ››› MARK BOCHKIS

An Augusta Chronicle editorial supporting the "Fair Tax," a proposal that "replaces all federal income and payroll based taxes" with a national sales tax, falsely stated that under the "Fair Tax" people will "get their entire paycheck." In fact, Georgia residents would still have to pay the Georgia income tax, which is withheld from their paychecks.

A November 16 Augusta (Georgia) Chronicle editorial supporting the "Fair Tax" plan, a proposal that "replaces all federal income and payroll based taxes" with a national sales tax, falsely stated that under the "Fair Tax" people will "get their entire paycheck." The editorial failed to point out that the "Fair Tax" would not pre-empt state income taxes, so Georgia residents would still have to pay the Georgia income tax, which is withheld from their paychecks. The editorial also cited radio host Neal Boortz as a supporter of the "Fair Tax" plan but did not note that Boortz himself has said that employees might not receive 100 percent of their current paychecks under the "Fair Tax" plan.

As the editorial noted, Sen. Saxby Chambliss (R-GA) -- who is in a run-off Senate election against former Georgia state Rep. Jim Martin (D) -- has endorsed the "Fair Tax" proposal. On November 14, the Chronicle endorsed Chambliss in his run-off against Martin, saying "the re-election of Chambliss is a must. He may be all that stands between the American people and congressional tyranny."

According to the Georgia Department of Revenue, "[e]mployers are required to withhold Georgia income tax from the wages of residents for services performed inside or outside of this state and from nonresidents for services performed in Georgia." Georgia income tax is "computed at a graduated rate and is assessed in a range from one to five percent on the first $10,000 of net taxable income (total tax on first $10,000 of net taxable income is $340) plus six percent of the excess of net taxable income over $10,000."

As Media Matters for America previously noted, on the November 29, 2007, edition of CNN's The Situation Room, correspondent Ali Velshi rebutted the claim that, under the "Fair Tax" plan, workers would get to keep their entire paychecks: "Now, this would be a 23-percent tax on everything you buy. Promoters like [former Arkansas Gov. Mike] Huckabee [R] talk about how you'd get 100 percent of your salary paid to you. Now, that is a myth. ... [Y]ou'd still have to pay all of your state and local taxes and property taxes. And, by the way, everything will be taxed -- including things like rent and health care."

Additionally, the editorial stated: "On Nov. 16, at the Gwinnett Center in Duluth, there will be a Fair Tax 'Truth' rally to clear up some of the lies and distortions about the Fair Tax featuring GOP presidential candidate Mike Huckabee, nationally syndicated radio host Neil [sic] Boortz and U.S. Senator Saxby Chambliss as guest speakers, among others." But the editorial did not note that Boortz, co-author of The FairTax Book: Saying Goodbye to the Income Tax and the IRS (William Morrow, August 2005), wrote in a September 25, 2005, post on his website: "Now, let's elaborate on the 'keep 100% of your paycheck' line that appears in The FairTax Book. It is certainly true that after the FairTax becomes law there will be no more withholding from your paycheck for any federal taxes. What you earn is what you get. This is not to say that your gross pay will equal what it was before the FairTax. This will depend on what your employer does when the embedded costs represented by the tax burden you have passed on to your employer disappear." Boortz later stated: "The 'keep 100% of your paycheck' concept can more easily be applied to those who either change jobs or come into the labor force after the implementation of the FairTax. A new worker will negotiate a wage with an employer knowing that the amount negotiated will be the amount that worker receives every two weeks ... no deductions."

In the post, Boortz also wrote: "When the FairTax is implemented, and when business and personal income and payroll taxes disappear, your employer is going to have to make a decision. He will either take some or the entire amount he had been withholding for federal income and payroll taxes and add it to your weekly check, or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call 'take home pay' before the FairTax. The employer may also decide to do a little of both."

From Boortz's post headlined, "The FairTax -- Straightening Out Some Confusion":

When the FairTax is implemented, and when business and personal income and payroll taxes disappear, your employer is going to have to make a decision. He will either take some or the entire amount he had been withholding for federal income and payroll taxes and add it to your weekly check, or he will readjust your pay figures so that your entire paycheck will be equal to what you used to call "take home pay" before the FairTax. The employer may also decide to do a little of both. Either way, you can see that the amount of money you actually receive as pay - the amount you can put into your bank account - will not decrease, and may actually increase.

[...]

Now, let's elaborate on the "keep 100% of your paycheck" line that appears in The FairTax Book. It is certainly true that after the FairTax becomes law there will be no more withholding from your paycheck for any federal taxes. What you earn is what you get. This is not to say that your gross pay will equal what it was before the FairTax. This will depend on what your employer does when the embedded costs represented by the tax burden you have passed on to your employer disappear. One thing is certain: You will suffer no decrease in real or net earnings


the amount of each paycheck you deposit into your bank account every other week. The "keep 100% of your paycheck" concept can more easily be applied to those who either change jobs or come into the labor force after the implementation of the FairTax. A new worker will negotiate a wage with an employer knowing that the amount negotiated will be the amount that worker receives every two weeks ... no deductions. Likewise, when you change employers you, too, will negotiate a wage that will not be subject to withholding, and you will get 100% of your wages in each paycheck.

From the Augusta (GA) Chronicle editorial:

A proposed 23-cent national sales tax, the Fair Tax would replace the current federal system of taxation -- meaning no income tax and no Social Security tax.

That means power to the people, because, first of all, they get their entire paycheck. Secondly, they determine the amount of tax they pay by the decisions they make on their purchases.

The Fair Tax also contains a feature called a "prebate" -- money that would wipe out federal taxes completely for those at or below the poverty line.

[...]

It's an awful shame that such a partisan shroud has fallen down around the Fair Tax. On Nov. 16, at the Gwinnett Center in Duluth, there will be a Fair Tax "Truth" rally to clear up some of the lies and distortions about the Fair Tax featuring GOP presidential candidate Mike Huckabee, nationally syndicated radio host Neil Boortz and U.S. Senator Saxby Chambliss as guest speakers, among others.

This isn't a Republican or Democratic idea. Fact is, it's a grass-roots movement that has been catching steam in recent years. What a tragedy it would be if Nov. 4 were to sap the energy out of the movement.

Posted In
Economy, Taxes
Show/Publication
Augusta Chronicle
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