(CNSNews.com) - Former senator, actor and possible Republican presidential candidate Fred Thompson has announced his support for replacing current tax law with a "Fair Tax," a position that could come back to haunt him, according to a tax policy analyst who supports the proposal.
"We share the same belief that the next president should enact a fundamental overhaul of the tax code that makes it fairer, simpler and more pro-growth," Thompson wrote in an Aug. 10 letter to the Americans for Fair Taxation (AFT). "I think the principles and ideas found in the Fair Tax are a good place to start, particularly given the grassroots support it enjoys across the country."
The Fair Tax is a proposal that would eliminate federal income and payroll taxes and replace them with a national sales tax with exemptions for poor Americans. Fair Tax bills were introduced into the U.S. House and Senate earlier this year, but no action has been taken on either bill.
Thompson, who has yet to officially announce his candidacy for the Republican nomination, joins five candidates -- former Arkansas Gov. Mike Huckabee, Rep. Duncan Hunter, Sen. John McCain, Rep. Ron Paul and Rep. Tom Tancredo -- in supporting the Fair Tax. One Democratic candidate, former Sen. Mike Gravel, has also voiced support for Fair Tax proposals.
The Republican frontrunners -- former Massachusetts Gov. Mitt Romney and former New York City Mayor Rudy Giuliani -- have not taken firm positions on fair tax proposals.
On his Web site, Romney calls the current tax code "a labyrinth that imposes an enormous and unnecessary burden on our citizens," but he does not mention the Fair Tax. Giuliani's site touts his "commitment to cutting taxes," but it also does not mention the Fair Tax.
Daniel Mitchell, a senior fellow at the libertarian Cato Institute, said that while he supports a Fair Tax "so long as you amend the Constitution first and permanently get rid of income taxes," candidates who support it could suffer consequences in general elections where support for the proposal is lower.
"Generally speaking, Republicans who support the Fair Tax, it might help them during the primary but it's very vulnerable to demagoguery in the general elections," Mitchell told Cybercast News Service. "Every time the sales tax has been a big issue, the other side has been able to demagogue by saying, 'So-and-so wants a 30 percent tax on everything we buy.'"
Mitchell said that Huckabee, who came in second place behind Romney in the recent Ames straw poll in Iowa, likely benefited from his outspoken position on the Fair Tax.
Huckabee had told the Des Moines Register that he "want[s] to be the president of the United States that nails the going-out-of-business sign on the Internal Revenue Service and ends a $10-billion-a-year nightmare called the IRS."
"By identifying himself as the sales tax candidate, he was able to tap into that cadre of committed people," Mitchell said of Huckabee's attraction to Fair Tax supporters. Candidates like Romney and Giuliani, he said, may remain quiet on their Fair Tax positions for fear of it being used against them further down the road.
Opponents of the Fair Tax argue that it is "regressive" because it places more of a burden on middle- and lower-income citizens than the current tax system.
In a letter to the AFT in April 2007, Sen. Hillary Clinton, a frontrunner for the Democratic presidential nomination, wrote that the Fair Tax "could result in a more regressive tax policy that disadvantages middle- and working-class families who would be deprived of [tax-deduction] benefits ... while having to pay a great share of their income to purchase household necessities."
Clinton said there are "many concerns that the tax code in its current form is too complicated and that it should be made simpler and fairer." But she also said she did not think the Fair Tax would solve those problems.
Clinton's chief rivals for the Democratic presidential nomination -- Sen. Barack Obama and former Sen. John Edwards -- both also oppose the Fair Tax proposal.
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