National Taxpayers Union -- 1999 Annual Conference

The NTU Board met yesterday, he shouted out to the 100-plus delegates from across the U.S. who’d come to Washington for the NTU’s annual conference June 10-12. And now -- at long last -- we’re gonna give a MUCH greater priority to SCRAPPING THE TAX CODE AND REPLACING IT . . . either with a national retail sales tax or, second choice, a flat tax.

The delegates were jubilant -- or, at least, as jubilant as a largely middle-class, culturally conservative, suit-and-tie wearing gaggle of delegates would allow itself to be.

“Way t’go,” someone sitting in front of me sputtered. He looked like Bob Barr, eminence noir of the Clinton impeachment hearings.

Half the men in this room look like Bob Barr, I thought unhappily.

But it’s only the conservatives who want to perform serious surgery on the tax code, a ghoulish masterpiece of unfairness, arbitrariness, and loopholes that sprawls over 14,000 pages and eats up $200 billion a year in compliance costs. (Attorneys love it. So do liberal social engineers.)

And if any group has the stature to lead a fight to replace the tax code with a simple tax, it’s the NTU.

The group has been around forever, claims 300,000 members, and is one of the 20 most media-cited NGOs in the U.S.

And its newfound militancy is an earned militancy. For three decades it nibbled around the edges of the problem -- fighting pork-barrel projects, supporting income tax indexing, spearheading state and local tax limitation movements.

A couple of its best people drifted off to staff newer, zippier tax reform groups.

But with Chairman Stanley’s eagerly anticipated announcement, the sleeping giant awoke. And the whole annual conference served to punctuate, celebrate, ratify its awakening.

Positive message

Like a lot of conservative gatherings, this one was not without a peculiar brand of bitterness.

Texas Rep. Charlie Stenholm warned delegates to beware of “win-win solutions,” best-selling author Martin Gross spoke darkly of a “they,” as in “their plan to destroy our will” to resist taxation, and Wall Street Journal writer Richard Vedder tastelessly compared Yugoslavia’s ethnic cleansing to our “tax cleansing.”

But most of the speakers were positive and upbeat, and delegates listened intently. The electricity in the air -- the sense that people could make a real difference if they just absorbed enough material and committed themselves totally -- reminded me, I realized with a start, of the hope and exhilaration I’d felt in The Movement in its glory days (1964-67).

Plus these folks were sitting in the air-conditioned splendor of the Hyatt Regency Capitol Hill Hotel, and we all had free access to as many dainty croissants, strawberry tarts, and fresh bagels (with whipped butter and cream cheese) as we dared to cart back to our seats.

Steve Forbes gave an inspiring keynote speech, making the vital point that tax reform isn’t about greed -- “it’s a matter of freedom, it’s a matter of quality-of-life.” (He digressed to quote from his granddad: “The purpose of business is to produce happiness, not to pile up millions.”)

Ken Blackwell, Ohio’s African-American Secretary of State, gave an even better speech, urging the delegates to observe “the duties at our doorstep” (a line from Dickens’s Bleak House) by fighting for tax reform at the state and local levels.

The more “local successes we celebrate,” he cried, the more likely it is we’ll be able to establish a national tax system that’s “simple and fair.”

The U.S. Greens couldn’t have put it any plainer.

Even Rep. Stenholm pointed to broad horizons when he suggested that radical tax reform is an ideal project for “the Radical Center.”

Sales tax v. flat tax

Chairman Stanley, you’ll recall, said that the NTU would prefer a retail sales tax but would support a flat tax. So all during the conference, speakers jockeyed to promote one kind of tax or the other.

Paunchy Martin Gross, from Greenwich, Conn., pushed the sales tax because it would minimize our contacts with the government (i.e., only businesses would have to file) and “no one would know what you make.” If you ever wondered why Governor George W. Bush’s “compassionate conservatism” is a red flag to some conservatives, you’d have learned from Gross’s speech.

Georgia Rep. John Linder, who’ll be introducing a retail sales tax bill on the floor of the House, took a more populist approach. He’d abolish the IRS “by 2005” and replace it with a sales tax in part because “all kinds of tax benefits to corporations in the tax code now . . . all this ‘corporate welfare’ . . . would all have to be voted on as spending items” once the IRS is abolished.

Everyone understood that most “corporate welfare” would go down the tubes. Nobody seemed to mind.

David Keating, red-bearded president of a public affairs firm, gave the most pragmatic defense of the sales tax, arguing that the public would love it because they’d “get to keep their entire paycheck.”

There were passionate defenders of the flat tax, too.

Alvin Rabushka, co-author of The Flat Tax and senior fellow at the Hoover Institution, argued that the flat tax would be easier to administer than the sales tax, easier on the poor (who could be merely be excluded from the flat tax -- they wouldn’t need rebates, as they would under the sales tax scheme), and wouldn’t promote smuggling, as the sales tax assuredly would.

Arguments became increasingly exotic. Should the new tax encompass Social Security taxes or “only” replace the income tax? Should sales tax supporters insist on abolishing the Sixteenth Amendment, which permits Congress to levy income taxes? Should flat tax supporters insist on a constitutional amendment forbidding Congress to graduate the flat tax?

I munched on a strawberry tart and wondered if I was beginning to look like Bob Barr.

NTU: 108 N. Alfred St., Alexandria VA 22314, www.ntu.org.

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