Ron DeSantis, former(?) FairTax supporter

With help from Alex Guillen

LOOK WHO WAS ON THE BANDWAGON: It’s true that the FairTax has a lot fewer GOP co-sponsors than it did in the past, as the proposal’s critics on the right like to note.

But that doesn’t mean it hasn’t had some interesting supporters over the years who now have a lot of the clout in the party.

To name one: Gov. Ron DeSantis of Florida.

Yes, a potential front-runner for the GOP nomination in 2024 co-sponsored what lots of conservatives love to paint as a fringe-right idea — a roughly 30 percent national sales tax that would also scrap the income tax and abolish the IRS (while also putting more work on other tax administration bodies).

Not only that: DeSantis co-sponsored the FairTax in each of his three terms in the House, where he was also a member of the conservative Republican Study Committee and then the House Freedom Caucus.

He sounded pretty enthusiastic about the plan too.

Whether it will be a vulnerability for DeSantis if he launches a presidential bid is an open question. Democrats haven’t been shy about trying to leverage it against Republicans in general, and opponents of the FairTax on the right consider it a self-inflicted wound.

A spokesperson for DeSantis did not respond to a request from Morning Tax to comment on his current views of the national sales tax legislation.

MORE ON THAT IN A BIT, but first — thanks for joining us for more Weekly Tax. And for those of us whose kids have somehow randomly ordered an enhanced music subscription or some weird trinket — just know it could be worse.

Guess it’s about time: Today marks 38 years since the French mineral water brand Perrier released its first new products in some 123 years — sparkling options with a twist of lemon, lime or orange. (Worry not — pamplemousse joined the fray a couple decades later.)

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The Boortz effect: In fairness to DeSantis, his support for the FairTax seems to be more the exception, rather than the rule, in his approach to taxes.

The Florida governor supported the GOP tax law as a House member in 2017, and pushed to cut sales taxes in the Sunshine State.

Grover Norquist, president of Americans for Tax Reform and a frequent FairTax critic, figures that DeSantis most likely signed onto the legislation to express general frustration with the IRS and the current tax system, not because he believed the national sales tax should become law as literally written.

Millions of people in Alabama, Florida, Georgia and South Carolina used to hear a show from a conservative talk radio host named Neal Boortz, who championed the FairTax for years and years — meaning lawmakers from those states frequently had to answer questions from constituents about the idea.

One easy way to deflect those questions, Norquist said, was to just co-sponsor the FairTax.

“They’ve been told this is the only way out of the mess we’re in,” Norquist said of listeners of The Neal Boortz Show. “And nobody has time to explain [all the problems with the FairTax] with someone in a 15-minute talk to the country club.”

Still, other Republicans previously saw DeSantis’ support for the FairTax as a potential political opening.

Most notably, Adam Putnam, the former agricultural commissioner who came in second in the 2018 gubernatorial primary, put out attack ads against DeSantis referencing the national sales tax.

But wait, there’s more: DeSantis isn’t the only Republican heavyweight to once sign on to the FairTax proposal. Rep. Jason Smith (R-Mo.), who’s now chair of the House Ways and Means Committee, co-sponsored it in 2013 and 2015.

When asked by Morning Tax why he is no longer a co-sponsor the legislation, Smith responded simply, “I’m chairman of the committee.”

Speaking of…: Smith is convening his first hearing as Ways and Means chair this morning — and it won’t be in that icebox known as the committee’s hearing room.

Instead, the panel will convene about three hours to the west, for a field hearing at a lumber product company in Petersburg, W.Va.

That choice is in keeping with Smith’s stated vision for the committee, which includes a big focus on working families.

How exactly or if that vision might lead to any real change in the GOP’s approach to tax policy remains to be seen. “We will hear directly from small business owners, workers, and families about how they have been affected by inflation, supply chain problems, and high energy costs,” Smith said in advance of today’s hearing.

NOT GONNA WORK: A Kentucky law designed to make coal mined there more attractive to utilities in the state looks to be unconstitutional, a federal appeals court ruled Friday.

Kentucky imposes a 4.5 percent severance tax on coal mined there, an approach that isn’t shared by many other coal-producing states. But a separate law requires the state’s public service commission to subtract the cost of the severance tax when approving utilities’ fuel contracts.

A company from neighboring Illinois, which doesn’t have a severance tax, challenged the Kentucky law, arguing that it disadvantaged its coal. And the 6th Circuit agreed, finding that the measure almost certainly violates the dormant Commerce Clause, which bars states from discriminating against interstate commerce.

Judge Joan Larsen, who was nominated by former President Donald Trump, wrote for the three-judge panel that encouraging state utilities to buy Kentucky coal was discriminatory. (A judge chosen by Bill Clinton joined Larsen’s opinion, while a George W. Bush nominee concurred.)

With the ruling, the case goes back to a lower court, which will consider issuing an injunction against the law while the legal process works itself out.

Around the World

BBC: “Liz Truss: I was never given realistic chance to enact tax cuts.”

Reuters: “Brazil’s government eyes raising income tax exemption in 2023.”

Reuters, also: “Russia may switch to Brent-based oil taxes – Kommersant.”

Around the Nation

Detroit News: “Michigan Democrats reach deal on wide-ranging tax cut, featuring rebate checks.”

Denver Post: “Colorado politicians want more property tax relief as state forecasts 26.5% increase in assessed values.”

WV MetroNews: “Session is halfway there; tax cut is living on a prayer.”

Also Worth Your Time

Bloomberg: “France Demands Transparency to Defuse Subsidy Fight With the US.”

Associated Press: “Tesla hikes price of Model Y after US alters tax credit rule.”

Financial Times: “The case for a land value tax is overwhelming.”

Did you know?

Hannibal, the famous general of Carthage, stopped at the spring in southern France that Perrier now uses for water.