Mike Huckabee’s advocacy of the “fair tax,” is helping his candidacy in South Carolina. Saturday Huckabee was in Charleston and according to the Charleston News many “fair tax” advocates were in his audiences.
Excerpts from the article:
- Supporters of the Fair Tax, a plan to replace the national income tax with a national sales tax, made up a good-sized chunk of the 100-plus people who crammed into a North Charleston hotel conference room to hear Huckabee.
- Charleston County GOP Chairwoman Lin Bennett, a Thompson supporter, noted that Huckabee’s position as the only front-runner who has endorsed the tax gives him a built-in base here. “These Fair Tax people, wherever you go, there are gazillions of them.”
- Huckabee discussed his nine-point plan for immigration reform, which calls for building a fence along the Mexican border by 2010, hiring more Border Patrol agents, imposing fines on employers who hire illegal immigrants, promoting immigration-law training for local police and modernizing the process of legal immigration.
- He said his proposal doesn’t include amnesty and would give those here illegally 120 days to leave the country and apply to return through legal means. Those who don’t leave would be deported and have to wait 10 years to legally return. “It’s not to be harsh but rather it’s to be fair to all,” he said.
- Huckabee said he believes his poll numbers have risen recently for several reasons, including his debate performances and a few extended televised interviews. He said martial arts star Chuck Norris’ endorsement helped, noting that almost every television network ran Norris’ endorsement spot.
From The Charleston Post and Courier, “It’s Still Anyone’s Primary,” written by Robert Behre
False advertising.
It’s not a “fair tax”, it’s just another sales tax. It’s not any more or less fair than an income tax, and it has no more promise of promoting prosperity nor a balanced budget.
Those who want a “fair tax” will support instead a constitutional amendment that prohibits government at any level from levying a special tax for any entity. All tax rates then would be set according to whatever criteria governments would devise, and all who qualified for a particular tax bracket or class would pay that percentage–no exceptions.
Otherwise, the national sales tax could turn into a copy of what’s currently in place in France–where tax officers roam the streets of Paris with thermometers to check the internal temperature of carry-out chickens to see if they’re prepared food or grocery items…
“He said his proposal doesn’t include amnesty and would give those here illegally 120 days to leave the country and apply to return through legal means.”
This guy is a nut.
Ruddick,
Where in the heck did you come up with those theories? Your pulling things from thin air or other places! The plan lays out precisely what would be taxed, no variations, no exemptions (except for education).
Jeffrey,
Come on, how is this guy a nut. What specifically is wrong with his plan? And who of the other candidates has a better one?
Keller, “the plan” is going to have to be implemented by our legislators. The original income tax was simple, no variations, no exceptions. Given time, the same politicians who turned the income tax code into thousand pages of labyrinthine code will wreak their havoc on your “fair” sales tax–and the facts of that pitfall will be seen clearly in the complex sales tax codes of European nations.
Any tax can be “fair” if it places a reasonable burden equally on all citizens of comparable means. A sales tax automatically does not do so: it excuses the ultra-wealthy, who spend a far smaller percentage of their worth, from their resonable greater burden–those who live paycheck to paycheck are overtaxed by such a proposal.
Require governement to set tax rates and prevent them from altering those for individuals–and perhaps get an attitude that taxation is for revenue only, and stimulus programs ought to be administered through grants–and we’ll have a tax system that’s fair in reality rather than in rhetoric.
Whats wrong with the plan is sending hunderes of thousands of undocumenteds back in a 120 day period. What’s the logistics of that? And how will it work on local and regional economies, by taking away the workforce?
Build that wall and really control the border. And then give anyone whos already here amnesty by granting them cizenship.. That’s the common sense approach.
Oh, and Ruddick is right about the sales tax.
Ruddick,
You are correct, the Fair Tax is going to have to be implemented by our legislators. Therein lies the reason why it will be very difficult for legislators to manipulate. By the time we have the legislators needed to make the Fair Tax Law, we will also have the grassroots, state by state momentum to repeal the 16th amendment, and vote out any rouge legislators. We currently have 70 in the House and gaining DAILY! With that type of grassroots, everyday American involvement, there is NO chance that legislators are going to manipulate the structure of the Fair Tax. With the repealing of the 16th Amend., the only options will be to raise the Sales Tax, which EVERY American will see whenever they make a purchase. At that point the likelihood of an increase will be slim to none. Sure they probably could come up with ways to exempt certain things, but how would they replace the revenue from the exemption other than to raise the tax or cut spending somewhere else? NO plan is going to be perfect, but this one is FAR better than what we have now, has been researched by nobel economists, researched and backed by another 75+ National Economists and Scholars, and will absolutely improve the American economy…even detractors agree that it will increase wages, & GDP by a sizeable amount.
Secondly I certainly hope most Americans don’t feel that the “Fair” thing to do is base a tax on a persons “Worth”. I don’t care if a man is worth 20 Billion dollars or 10 dollars, why should a tax be based on worth? That only makes sense under Communistic or Socialistic value systems. Sure we should give a hand to those less fortunate, but there’s no need to transfer one man’s worth to another man…that’s just fundamentally not WRONG! If you take out ALL of the Social spending, then I may agree to some sort of basis on “ability to pay”, but that’s not the situation we’re in. Also, if you think that an income tax at whatever rate taxes the ultra-wealthy any better than something like the Fair Tax…..your more naive than your comments lead me to believe. Who do you think pays for the Tax Code lobbyists in Washington who game the system for specific code preferences? Do you honestly believe that the Ultra-Rich don’t pass almost the entire amount …at whatever rate…down to thier shareholders, business, employees, and the customers. If you believe that even a 70% rate on the Ultra Rich would somehow even things out….well take a trip back to when the rates were that high. What did we have….70% rates, but the code was FILLED with loopholes, exemptions, etc. So what did they do, the reduced the rate to a seemingly more reasonable percentage, but at the same time eliminated an equivalent amount of deductions…so truly there was VERY little change. Many of the Ultra-Rich who haven’t moved their wealth off shore yet, have already figured out a way to only pay 15% by claiming not to have an “income” and getting their compensation through other means, and I’m sure most of that has been passed down to others somehow. The most fierce opponents of the Fair Tax are the ultra-wealthy, and large corporations. They CLEARLY understand that if the Fair Tax happens, there will be no more “special” deductions.
Finally, I like your plan in the last paragraph of the post, but where’s the “official” congressional bill on that? And the researchers who have worked through all the details etc.? I’m sure there are Major drawbacks to your plan, how will we sell it ? The problem is many people think there is a better, more “fairer” way, but the only “official” alternative out there is the Flat Tax, which isn’t a very good alternative. The authors and composers of the Fair Tax spent millions on research and work trying to come up with the “Best” alternative to the current system. If you’d like I can give you their contact info. and you can submit your theories and see what they say?
Jeffrey,
First of All…. You MUST get the plan correct. He has a 9 point plan, #’s 1 & 2 deal with closing and securing the border.
#3 – Say’s – “provide all illegal immigrants a 120-day window to register with the Bureau of Citizenship and Immigration Services and leave the country. Those who register and return to their home country will face no penalty if they later apply to immigrate or visit; those who do not return home will be, when caught, barred from future reentry for a period of 10 years”
The key thing for you to notice is that it says NOTHING about rounding anyone up and shipping them back! They are given a VERY GENEROUS incentive to return on their own. If they do it within the 120 days they will be able to get in line like EVERY other Legal immigrant…..if not, their not coming back for at least 10 years! Another Key thing for you to notice are the words “when caught”, this implies a passive approach, not an active mobilization of police and military rounding up all Ill-legals. The reason that rounding them up won’t be needed is contained in item #4 on the list – Enforce Laws On Employers – This will make it almost impossible for “ill-legals” to make a living and provide for their families, unless they can prove citizenship, and will be a HUGE incentive for them to return home within the 120 days. And #9 – Modernize The Process of Legal Immigration – Will provide another incentive for Ill-legals to return home within the 120 days. If they feel like the system is going to process them quicker and make them “legal” within a reasonable time…..the will go home on their own….no rounding up needed.
Keller, surely you don’t expect us to believe that your 70-and-growing legislators will all continue to conform to the plan as advertised? That would be so naive! Legislators aren’t constrained unless there’s constitutional authority–and even that’s not fail-safe (consider how our state representatives and senators continue to violate our constitution).
But moreover, let’s look at your assumption that people should not be taxed according to their incomes (which, BTW, are not entirely synonymous with “worth”).
If three people had to cooperate to carry 200 pounds of stuff five miles down the road–and one of them was a power-lifter, one was an old college professor with bad knees, and another was a 12-year-old girl–how should the load be divided? Applying the same effects as your “fair” tax proposal, the power-lifter would wind up carrying about 50 pounds, the college professor 40, and the 12-year-old 110.
That’s because consumption does not increase concomitantly with income. A person who makes $20,000 per year would pay sales tax on ALL of it because it’s all needed for living expenses. Meanwhile, a person who earns $1 million per year is going to pay sales tax of maybe 1/4 of it, reserving the rest for investments that will soon increase that salary to $2 million per year.
I’ll note, for the historical record, that the greatest periods of prosperity in the past 100 years of US history coincided with balanced federal budgets–and in the 1950s, a set of income tax brackets that topped out at 99% (for income over $1 million, and with a lot of loopholes!). So your economists can theorize all they want, but history seems to me to be a more reliable indicator.
Ruddick,
I agree that it’s very hard to trust that Legislators will do the right thing. But we’ve got to do something, standing back and letting them continue as they are will only produce tragic results and will affect our children and grand children the most. So, like I said we must do something NOW…and much more than the small tweaks that others have proposed. As I write this today, I don’t believe that we could keep ALL legislators in line with the Fair Tax proposal, but we are VERY close. Here in South Carolina, we have the consumate politician in Lindsay Graham. He twists and turns and you can’t trust a word he says. His stances have been extremely irreresponsible and anti-constituent. So I firmly believe he will be replaced in the next election. The three Republican candidates running against him not only realize the benefits of the Fair Tax and are FERVENT supporters, but they also see the overwhelming support that the Fair Tax carries here in South Carolina. Currently it has become a reality that it’s a “Good” thing to have Fair Tax supporters on your side, but with the movement growing exponentially, very soon ALL candidates will realize it’s no longer just a “good” thing….it will be a necessity! And this is happening district by district across, not just South Carolina, but across the United States. It’s stronger in some areas than others at the moment, but is spreading like wild fire. We are becoming VERY well organized down to each congressional districts level, and will soon have enough active supporters/voters to have an influence on almost every election. I’m sure some areas will be harder to break into than others, but many of us have been at this a good while and are very persistent and patient and WILL see it through to success. This is a movement to take back control of our government and we are NOT going to get this thing passed and simply end it at that. There will be next steps beyond the plan and it’s implementation, there will be watchdog duties, passing legislation that controls spending, etc. etc…..but it’s a one at a time process and this is the first, and most important step in that process.
I’m not going to try to pick apart your story, because I don’t think the theory fits very well, there are too many nuances that aren’t quite a fair comparison. But I will say that you fail to mention that the Pre-bate in the Fair Tax would allow someone making “$20,000 yr” to pay absolutely NO TAXES on “living expenses” . So, immediately it blows the “lifting the same weight” theory out of the water. The rich get the same pre-bate, but I GAURANTEE you they spend far more on “basic necessities” than a $20,000 yr guy spends. Also, having been in the lower pay scale at points in my life, I know we bought used items on a Regular basis, sometimes almost exclusively. So low income earner’s will get the Pre-bate, and will also be able to purchase used items, and pay absolutely NO TAX. Most Wealthy people will not even consider purchasing USED items, especially the volume of used items that lower income individuals purchase. So, this will be another lightening of the load.
Here are some other Progressivity facts concerning the Fair Tax:
The FairTax not only lowers remaining average lifetime net tax rates. It also maintains and, indeed, enhances overall progressivity in the tax system. Consider middle-aged married households. The FairTax average lifetime tax rate is very low – only 1.5 percent – for the couple with $20,000 in annual earnings, and much higher – 20.5 percent – for the couple with $500,000 in annual earnings. The reduction in the tax rate at low earnings is proportionately much greater at the low end of the earnings distribution than at the high end. In switching to the FairTax, the $20,000-earning couple experiences an 86 percent cut in its average tax rate, whereas the $500,000-earning couple experiences a 42 percent cut.
Second, because it effectively taxes existing wealth, taxing consumption penalizes the rich, potentially enhancing overall tax progressivity. Even if the rich save their existing wealth and bequeath it, plus any accrued capital income, their wealth still ends up getting hit with a tax once their children or other heirs spend these resources.
The current system’s marginal wage tax rate exceeded the FairTax’s 23 percent marginal rate for all of the 42 single and married stylized households that were considered.
For some low- and middle-income households, the marginal tax on working under our current tax system is more than twice the 23 percent FairTax rate! Take, as an example, a middle-aged married couple earning $30,000 per year with two children. Given their federal tax bracket, their loss, at the margin, of the Earned Income Tax Credit from earning extra income, and their exposure to marginal FICA taxation, their current marginal tax is 47.6 percent!
Compared with our existing federal tax system, the FairTax, as
proposed in H.R. 25/S. 25, would significantly reduce marginal taxes on work, dramatically reduce marginal taxes on saving, and substantially lower overall tax burdens on current and future workers. Moreover, it would do this without limiting tax progressivity. Indeed, the FairTax would make our tax system more progressive.
I do have all research to back ALL of this up.
Keller, I’m sure that you do have research that advocates of the FairTax Plan are distributing. Naturally, materials written by advocates will show reasons why whatever it is they are advocating is a good idea.
The Wall Street Journal in my post, “Huckabee Has Radical Views — About Evolution, The Fair Tax and His Personal Faith,” says the FairTax rate would need to be at least 30% — not 23%, and it says that pressure to implement this new tax system may bring about the implementation of a national sales tax that will simply be added to the income tax we already have.
A second article I posted from the NY Times, “Our Growing Huge Debt Means Politicians Must Find A Way To Discuss Raising Taxes,” points out that since 2002 our national debt has grown by $3 trillion and that, as things look now, many trillions more of debt will be added in the future. We need to find a way to raise tax revenues — so, it appears that not even 30% rate will not be sufficient to meet revenue needs — another 5% maybe? A 35% national sales tax in addition to state sales tax? Absurd. We would need a bigger bureaucracy than the IRS to monitor all the ways people would seek to avoid paying that tax.
There is too much time and energy being spent on an idea that is sure to go no where. It appears to me in large part to simply be a political ploy — a phony wedge issue, and, I feel that experienced politicians such as Huckabee, who have benefited from the support of FairTax enthusiasts, knows it is an idea that could never work and that never in a million years would ever be enacted.
And if Huckabee actually received the Republican nomination, I think you will find that his statements about the FairTax will begin to moderate. What do you make of this excerpt from the Wall Street Journal cited above: “In 2004, Democrats came from nowhere to nearly beat South Carolina Senator Jim DeMint by pounding his support for the fair tax. His opponent said it would raise taxes on 95% of state residents, and Mr. DeMint had to disavow his support.”
I think the whole thing got started because Hate Radio talkers like Neil Bortz simply wanted something more to stir people up with. Even though Bortz wrote a book about it, I really doubt that even he is a true believer. The whole idea is just too over the top.
I appreciate the effort you appear to be putting into this idea — you seem to have a good motive. But, here is a newsflash: this idea is simply not worth your effort.
The Wall Street Journal, etc. are in bed with the big money groups trying to ensure there is no change to their favorable tax system…that they are still currently able to manipulate. This thing is far bigger than Boortz, and was in development well before he came aboard.
MOST SOURCES ARE NOBEL ECONOMISTS, ETC.
The FairTax is far more progressive than the current income tax system. Under
the FairTax, low-income households experience five times the benefit increase as compared to high-income households. And a switch to the FairTax causes real wages to rise. Source: Jokisch, Sabine and Laurence J. Kotlikoff, “Simulating the Dynamic Macroeconomic and Microeconomic
Effects of the FairTax,” NBER Working Paper No. 11858, December, 2005 and Kotlikoff, Laurence J. and David
Rapson, “Comparing Average and Marginal Tax Rates under the FairTax and the Current System of Federal
Taxation,” NBER Working Paper No. 12533, Revised October 2006. Available at
http://people.bu.edu/kotlikoff/Simulating%20the%20Dynamic%20Macroeconomic,%20October%204,%202006.pdf.
The FairTax eliminates the highly regressive tax on wages of the working poor
and middle class. The FairTax removes the single most regressive element (the payroll tax) for wage earners. Payroll taxes are currently imposed on the first $97,500 of earnings but drop steeply to only a few percent above that amount. The FairTax repeals this unfair tax and allows wage earners to keep their entire paycheck. According to Robert Reich, former U.S. Secretary of Labor, “Everyone hates taxes, but the payroll tax has got to be the worst. Four out of five American workers pay more in payroll taxes than they do in income taxes. The payroll tax is also regressive as hell — poorer workers pay proportionately more than richer ones.”
Source: Reich, Robert B., “Whose Tax Cuts?” The American Prospect, Volume 13, Issue No. 22, December 16,
2002. Available at http://www.prospect.org/print/V13/22/reich-r.html and HR 25.
The FairTax stops the export of jobs. Our income tax favors imports over U.S.
production by exempting imports from U.S. tax, and we penalize U.S. exports by allowing foreign nations to impose taxes when our goods enter their shores. This adds up to an average 17 percent price advantage over U.S. produced goods, which greatly depresses U.S. exports and costs us jobs. The FairTax stops this abuse by taxing all goods consumed in the U.S. alike and
untaxing exports. Source: “Hausman Study Shows Distortions in International Trading System Hurting U.S. Manufacturers: An Economic Analysis of WTO Rules on Border Adjustability of Taxes,” May 2006. Available at
http://www.standupforsteel.org/hausman.html.
The FairTax is the only plan that targets and taxes existing wealth, not the fruits
of labor. The FairTax will tax every dollar of accumulated wealth in the most efficient way possible – when it is spent. Tax shelters, loopholes, or other gimmicks to shield large wealth from taxation will be a thing of the past.
Source: Kotlikoff, Laurence J., “The Case for the FairTax,” The Wall Street Journal, March 7, 2005, page A18.
The FairTax boosts the real growth and prosperity of the U.S. Independent
research studies confirm the powerful economic effects. Beacon Hill Institute predicts that real GDP would be 10.3 percent higher in just four years under the FairTax. Laurence Kotlikoff, Ph.D., predicts the capital stock to be 12.8 percent higher by 2010 and 43.7 percent higher by 2030, leading to real wages that would be 11.5 percent higher in 2030 than otherwise would be the case if the current tax system remained in place. Source: Tuerck, David, et al., “The Economic Effects of the FairTax: Results from the Beacon Hill Institute CGE
Model,” The Beacon Hill Institute at Suffolk University, February 2007 and Jokisch and Kotlikoff, “Simulating the Dynamic Macroeconomic and Microeconomic Effects of the FairTax,” September 2006. Available at http://people.bu.edu/kotlikoff/Simulating%20the%20Dynamic%20Macroeconomic,%20October%204,%202006.pdf.
The FairTax is revenue neutral. The FairTax, at a 23 percent tax rate, raises the
same amount of money for the federal government as today’s income tax system. This means that steep budget cuts are not required to pass meaningful tax reform. Source: Bachman, Paul, Jonathan Haughton, Laurence J. Kotlikoff, Alfonso Sanchez-Penalver, and David G. Tuerck, “Taxing Sales Under the FairTax: What Rate Works?” Beacon Hill Institute, published in Tax Notes,
November 13, 2006. Available at http://www.beaconhill.org/FairTax2006/TaxingSalesundertheFairTaxWhatRateWorks061005.pdf.
The FairTax promotes the American Dream. The FairTax makes home
ownership more affordable because used homes are totally untaxed, and three out of four homebuyers buy used homes. For new and used homes, the FairTax does not tax the earnings used to pay mortgages, interest rates will be far lower under the FairTax, and a homebuyer can save for a down payment faster than under current law. Source: “Promoting home ownership: How the FairTax’s benefits for homeowners exceed the mortgage interest
deduction,” Americans For Fair Taxation White Paper. Available at
http://www.fairtax.org/PDF/PromotingHomeOwnership.pdf.
National Public Radio’s “All Things Considered” exposed the “fair” tax for a con job. It turns out that the economists who claim it will work were hired by the “Fair” tax supporters. Independent economists claim that it won’t work–
In the first place, the actual tax rate will be around 30% on all sales. The plan calls for mediating the impact on the poor by providing them with federal grants to offset their costs–so in essence poor Americans will pay no taxes at all. The wealthy will pay far less, and the burden will again be shifted brutally to the middle class.
And as one analyst noted, promising to abolish the IRS is a popular campaign slogan, but there will have to be a bigger, more complex agency to track, collect and enforce taxes on every transaction (let’s face it, there are dozens of transactions for each paycheck)–and then the grants program for the poor will amount to the most massive welfare system ever devised in history, requiring another Brobdinagian federal agency to administer it.
Not to mention that all of the honest pundits agreed with me: once you pass this legislation, every rep and senator will be out to pass a loophole for her/his favorite campaign donors. Can’t you just hear John Boehner now, intoning in his husky smoke-damaged voice that cigarette companies are already subjected to heavy taxes and an additional 27% sales tax would be an un”fair” burden.
It’s a pig in a poke, and if you don’t see that, you need to adjust your b.s. detector for greater sentitivity.
Any tax plan that is marketed as “the Fair Tax” is obviously attempting to brand itself by repetition of a favorable but meaningless label, a trick of advertisers and public relations manipulators. If it were really so fair, it wouldn’t need that label. The use of that label is reason enough to be against whatever is being sold, until the drop the branding and sell the thing on its merits.
The other tax policy that’s marketed like that is the estate tax being renamed the “death tax.” Everyone is against death, right? Again, this is all marketing.
Fairness is a highly subjective concept, particularly on subjects like taxation that are mostly “zero sum” pitting one side against the other. Some taxes a re clearly unfair if people are unable to pay them, say the property taxes for people with low fixed incomes that we use to finance schools. But when people have the ability to pay, those issues get fuzzy. The Bush tax cuts for example, transfer the tax burden from the rich to everyone else. You can argue that we are paying the rich because they use their vast wealth to benefit everyone else. But do they? Or you can argue that the economy benefits more if a larger group of people gets the money and is more likely to spend it on things that employ others. You can argue that charitable giving or investment or saving or sending kids to college are good things that should be supported by “tax expenditures.” Or it may be that Bush’s wealthy supporters worked the system better, using to their advantage in giving campaign contributions (investing in Congressmen) that are allowed, and are therefor writing the rules to their benefit. Some influential people have a visceral dislike for taxation in all forms, seeing it as an intrusion into their personal space and integrity.
Other tax issues involve the enforceability, ease of collection, and perception that the burden is being shared in some equitable way, and not being gamed or evaded.
In sum, tax policy is complex and with many of the nuts and bolts choices that we face, the devil is in the details. Business people that have the most power in the country do not really want to “scrap the internal revenue code” as much as they want to beat it under rules that are predictable. The present tax system however is so aggravating to the average person, that campaigning against it is always a winner. And when there are changes in the tax code, they are generally even more complex and filled with loopholes and rewards for contributors.
In sum, anything that calls itself the Fair Tax has to be a bad idea. Nothing about this plan, replacing federal taxes with a sales tax, suggests anything different.
The power to tax income is absolute, and you know what they say about absolute power. It’s undemocratic, it’s unAmerican and it ought to be unconstitutional. As long as our elected representatives can count on our mandatory financial support, they need not listen to our needs or respect our rights what so ever.
The founding fathers gave us the right to bare arms in order to keep government in check. But seriously, who’s going to take up arms against the government today? This is why the government is out of control and why we, the people, are absolutely powerless to do a damn thing about it.
The Fair tax would turn this three ring circus around in two ways. First it would eliminate the guaranteed and predictable stream of revenue that Congress uses as collateral to borrow from the Fed, eliminating deficit spending and public debt. (This is why Congress is always so full of cash and crooks.) Second, it would give the people the collective power to control the internal revenue of the federal government. These two changes alone would shrink the federal bureaucracy as effectively as a bottle of prune juice shrinks your waist line.
Those representatives who remain in government thereafter will have no choice but to listen to their constituents over the special interests and respect the Constitution and the bill of rights before typing a single letter of legislation.
Have any of you actually read the FairTax Book? From the looks of it i would say no. It is “fair” in that no one pays INCOME taxes but everyone pays sales tax, sort of like Texas, Florida and Tennessee, who have fairly strong economies. California, of course, has the highest income tax and look at their economy. Here’s some info debunking the 30% sales tax lie http://www.fairtax.net/14.htm. While I prefer NO income tax with nothing replacing it, the Fair Tax would be a good start.