Rep. Matthew Hill Lies: About Cutting Grocery Taxes

I would not have much of a problem with Rep. Matthew Hill's recent radio campaign advertising with regard to "cutting grocery taxes" if narrator and Leitner Pharmaceutical lobbyist Jim Holcomb had only used the phrase "cutting Tennessee state sales taxes on groceries" --- you see, Rep. Matthew Hill is attempting to pull a Frank Burns here and not tell you the full story of how Rep. Hill, his brother Timothy Hill and Rep. David Davis) are all advocates of the so-called "Fair Tax" scheme that, according to a Wikipedia article, would place a 30% federal sales tax on grocery items:

[...]

The FairTax legislation would apply a 23% federal retail sales tax [actually 30%; see following] on the total transaction value of new retail goods and services purchases; in other words, consumers pay to the government 23 cents of every dollar spent (sometimes called tax-inclusive — as income taxes are calculated). The assessed tax rate is 30% if the FairTax is added to the pre-tax price of a good like traditional sales taxes (sometimes called tax-exclusive). The FairTax legislation uses total transaction value (tax-inclusive) in presenting the rate; with an item purchased for $100, the retailer receives $77 and the remaining is collected for the federal government. However, American sales taxes have historically been expressed as a percentage of the original sale price (tax-exclusive); items priced at $100 pre-tax cost $130 with the tax added. The use of the tax-inclusive number in presenting the rate has been criticized as deceptive by the plan's opponents.Proponents argue that the 23% number represents a better comparison to income tax rates, which are presented as inclusive rates.

A good would be considered used and not taxable if a consumer already owns it before the FairTax takes effect or if the FairTax has already been paid on the good. The FairTax would tax all services provided at the retail level. Personal services such as health care, legal services, haircuts and auto repairs would all be subject to the FairTax, as would renting apartments and other real property. State sales taxes do not generally tax such services. Education, training, saving and financial investing would be considered an investment (rather than final consumption) and therefore would not be taxed.

While Rep. Hill has previously introduced house bills seeking to eliminate the Tennessee state sales taxes on bread and milk, I am waiting for Marc Bernier to nail Hill for the "cutting the grocery taxes" misinformation that his campaign staff of monkeys is busily spewing out over the public airwaves.