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Huckabee’s ‘flat-tax’ is a fair tax
Published Saturday, January 5, 2008
After watching the results from Thursday’s Iowa caucuses, it was clear that, if you had been intensely following the race, say, in September and then buried yourself in a hole for the past three months, the name Mike Huckabee was the biggest surprise.
After all, the Republican field for president contained three household names: John McCain, who was the silver medalist for the Republican nomination in 2000; Rudy Giuliani, the former New York City mayor with whom 9-1-1 is now associated; and Fred Thompson, an actor and politician who specializes in playing generic military types (see The Hunt for Red October).
To see not only Huckabee took first, but Mitt Romney, a Mormon who was governor of ultra-liberal Massachusetts, took second, it was clear that, at least in Iowa, star power alone wasn’t going to get it done in the minds of voters.
On the Democratic side, sure, it was somewhat of a surprise that Illinois Sen. Barack Obama scored as big of a win as he did, and that Hillary Clinton slipped some. But Iowa showed what had been clear all along: this might be a three-way race between Obama, Clinton and Sen. John Edwards for a while.
Clearly, the Republicans have found a diamond in the rough in Huckabee. They knew very well that, with George W. Bush getting some of the lowest approval ratings of all time, they needed to find a candidate who would cause those who voted for Bush and wished they hadn’t to think twice about automatically voting for whoever the Democratic candidate might be.
Huckabee is clearly the right guy to get the regretting Bush voters to stay Republican.
First off, based on what I saw of him on Jay Leno the other night, Huckabee is clearly likeable. He’s funny, self-deprecating, and while he’s a former pastor, he doesn’t wear his religion on his sleeve.
Huckabee also provides answers that seem genuine and off the cuff. One of my biggest complaints about politicians is that, no matter what question a media member asks, their answers generally come around to their “talking points” that some public relations guru wrote.
Most politicians — and certainly the experts who “consult” for them — have not yet figured out that most voters don’t want canned answers. And they don’t want diplomatic responses that allow politicians to avoid saying something that may offend someone.
If the Jesse Ventura era in Minnesota did anything, it showed that Ventura’s say-what-I-think style may have offended a few. But those few were far outnumbered who liked Ventura’s forthrightness.
As far as the issues go, I certainly am not hip on everything Huckabee stands for, especially when it comes to social issues. But I do like one idea he has: the flat tax, or “Fair Tax” as he calls it.”
Here’s a quote from Huckabee’s web site:
“The FairTax will replace the Internal Revenue Code with a consumption tax, like the taxes on retail sales 45 states and the District of Columbia have now. All of us will get a monthly rebate that will reimburse us for taxes on purchases up to the poverty line, so that we're not taxed on necessities.
That means people below the poverty line won't be taxed at all. We'll be taxed on what we decide to buy, not what we happen to earn. We won't be taxed on what we choose to save or the interest those savings earn. The tax will apply only to new goods, so we can reduce our taxes further by buying a used car or computer.”
It isn’t a new idea. In fact. Rep. Collin Peterson has had the idea for some time.
My only issue is that, considering the giant that is Congress, and the fact that it likely will stay Democrat for the next four years, does Huckabee really have a chance of passing it?
I hope his charm can go a long way.
Comments
The Daily Journal is happy to host community conversations about news and life in Fergus Falls and the surrounding area. As hosts, we expect guests will show respect for each other. That means we don't threaten or defame each other, and we keep conversations free of personal attacks. Witty is great. Abusive is not. If you think a post violates these standards, don't escalate the situation. Instead, flag the comment to alert us. We'll take action if necessary. It's not hard. This should be a place where people want to read and contribute -- a place for spirited exchanges of opinion. So those who persist with racist, defamatory or abusive postings risk losing the privilege to post at all.Posted by Blixx (anonymous) on January 5, 2008 at 10:01 a.m. (Suggest removal)
The FairTax is nothing more than a fraud that shifts the tax burden from the wealthiest to the middle class, with a rebate smokescreen thrown in to help a handful of the poorest . Criticism of the FairTax is very rare in the press and that's a crying shame. Hate Radio spends every working hour promoting it on their daily radio programs, yet this tax plan sees no critical analysis in the mainstream media. Make no mistake - this plan was designed by billionaires for billionaires. The most complete analysis on the dirty little secrets of the FairTax can be found at fairtaxfraud.com.
Posted by FairTaxJeff (anonymous) on January 5, 2008 at 10:41 a.m. (Suggest removal)
gee, maybe criticism is rare because it's actually a well thought out and researched economic proposal ???
Posted by vanderbh (anonymous) on January 5, 2008 at 11:16 a.m. (Suggest removal)
Joel,
Thanks to you and others like you more people are getting educated on the FairTax. Alot of the criticism I see by other reporters is based on half-truths, bias, out-right lies, and poor (or no) research.
By the way a few years ago, Rep. Collin Peterson was one of the first co-sponsors of Congressman John Linders FairTax Bill HR25. There are over 70 Congressional co-sponsors and over 600,000 grassroots supporters. The way to get the FairTax passed is the same way women got the right to vote...a GRASSROOTS effort. We must tell our representatives what we want, and vote them out if they do not listen. For more info go to www.fairtax.org.
Posted by FairTaxJeff (anonymous) on January 5, 2008 at 11:39 a.m. (Suggest removal)
Grassroots update - if you figure Huckabee at 33% of GOP voters, then the "surge" just made it 20,000,000 grassroots supporters!
It really is a proposal for broad economic reform, of the type never before seen/done in modern economic times. Naysayers pick apart one aspect or two, without even considering the bigger picture.
My view is 1) the fact that ONLY citizens pay taxes - business do not (they only pass thru taxes collected in the form of higher prices). 2) There are 3 possibilities to tax: income, consumption, assets (property).
We tax the wrong thing, income instead of consumption. So start with a blank page (like the Fair Tax did), create a national sales tax. And here's a novel idea: WE CAN MODIFY IF NECESSARY AS WE GO BASED ON EXPERIENCE. Naysayers seem to want all the answers guaranteed up front - can't happen. Naysayers say if it's modified we'll just end up where we are today all over again to which I say SO WHAT? If it takes 90 years to make a mess of the Fair Tax, we'll just start all over again in 90 years!
Posted by mgdbottled (anonymous) on January 5, 2008 at 12:25 p.m. (Suggest removal)
Anyone that pushes for a consumption tax is either stupid or just plain immoral. Go read my graduate paper on "The Welfare Implications of a Consumption Tax vs the Income Tax". Anyone confused, please take a basic economic course and understand the principle of "diminishing marginal utility". That's the principle whereby the more units you acquire of any particular good the less a rational person values each additional unit. In this case the good is money "a dollar". Thus the reason for the progressive income tax system. It's efficient and by taxing the wealthy at a higher rate, social welfare or society's well being is less effected by the tax. Calling a consumption tax a "FAIR TAX" is a LIE and a SIN. Just plain IMMORAL. A big lie; but a normal course of business for republicans in this day and age. The tax would shift the entire burden to the middle class. The poor wouldn't benefit as they don't pay any income taxes now. The middle class would get killed. The wealthy would pay very little (as a percentage of their income) as they don't need to spend their entire income to survive. I don't believe AMERICANS are that STUPID yet.
Posted by BobWilliams (Bob Williams) on January 5, 2008 at 2:29 p.m. (Suggest removal)
C'mon. Where's the link to your enlightening paper? I, for one, would love to read it, right after I finish my Factor 10 Econ reading for the day.
Posted by mgdbottled (anonymous) on January 5, 2008 at 3:40 p.m. (Suggest removal)
You'll find it at the NDSU Library. Written in 1981-1982 before the days of the internet or household computers for that matter. My point is that any consumption tax is a terribly inefficient tax. The only problem with the current income tax is that there's way to many nonsense tax breaks for the wealthy. Nothing wrong with the current income tax system which provides avoidance incentives that promote reinvestment and economic growth which inturn provide more jobs. With the current system, the only way to pay less tax is to reinvest those profits in your business. Reduce those high end tax rates and you reduce that incentive to reinvest and actually slow the economy. Simple math. Reducing tax rates on the wealthy is just a bad idea. Replacing the progressive income tax system with an expenditure tax is just plain moronic.
Posted by Jerry (anonymous) on January 5, 2008 at 3:48 p.m. (Suggest removal)
The mainstream media, known as the driveby media don't say anything about it because they are ultra-liberal and refuse to mention anything that is percieved as positive or a good idea. I'm waiting for my millions since all republicans are rich. The rich already pay over 90% of the taxes collected, but of course they are also the ones that own the companies that hire all the taxpayers. Just think liberals, with the Fair Tax there would be more money for the warm, fuzzy, give-a-way programs that you love so much. Yes I agree the Americans are not stupid, that's what makes them fed up with the current tax system. The Fair Tax has growing momentum and will not go away. Suck it up liberals, become conservatives, then you to will be rich!
Posted by mgdbottled (anonymous) on January 5, 2008 at 4:23 p.m. (Suggest removal)
Call it what it really is. The Working Man's Tax. The tax on consumption ie; the consumer. And only the consumer. Take away from the rich guy the incentive to reinvest in capital and equipment and this country would be in a major "Depression" within a decade. Remember back in the '80s when Reagan signed a bill containing a major revamp of the then tax code. What happened? The Savings & Loan industry went bankrupt because of that tax code change and Congress had to bail it out by spending hundreds of billions of dollars repaying insured depositors. That was only one industry. Imagine what would happen if the rich guy didn't have to risk his profits by reinvesting in capital and equipment to avoid the income tax. This capitalist economy would come to a screaming halt in no time. The rich would still be rich and the working class would be unemployed.
Posted by Elizabeth (anonymous) on January 5, 2008 at 5:53 p.m. (Suggest removal)
Excuse me, but I must have read that wrong - Huckabee doesn't wear his religion on his sleeve? Since when?
Posted by Rumpusgoopus (anonymous) on January 5, 2008 at 6:20 p.m. (Suggest removal)
It's always odd reading a newpaper column that even though it's clear that the author knows very little about what he's writing about (and I'm not even talking about the merits of the consumption tax, I'm talking about the general understanding of the issues and the presidential race) the newspaper still chooses to print it.
Posted by Ian (anonymous) on January 6, 2008 at 2:47 a.m. (Suggest removal)
The effective tax rate percentages, that different income groups would pay under a FairTax consumption tax, are calculated by crediting the monthly "prebate" (rebate of tax on necessities) against all likely monthly spending of citizen families (1 member, and greater based on figures established by the Dept. of Commerce - a single person receiving ~$200/mo. A family of four receiving ~$500, in addition to family earners receiving their WHOLE paycheck). Prof.'s Kotlikoff and Rapson (10/06) have concluded,
(From study: http://snipurl.com/kotcomparetaxrates ) "...the FairTax imposes much lower average taxes on working-age households than does the current system. The FairTax broadens the tax base from what is now primarily a system of labor income taxation to a system that taxes, albeit indirectly, both labor income and existing wealth. By including existing wealth in the effective tax base, much of which is owned by rich and middle-class elderly households, the FairTax is able to tax labor income at a lower effective rate and, thereby, lower the average lifetime tax rates facing working-age Americans.
"Consider, as an example, a single household age 30 earning $50,000. The household’s average tax rate under the current system is 21.1 percent. It’s 13.5 percent under the FairTax. Since the FairTax would preserve the purchasing power of Social Security benefits and also provide a tax rebate, older low-income workers who will live primarily or exclusively on Social Security would be better off. As an example, the average remaining lifetime tax rate for an age 60 married couple with $20,000 of earnings falls from its current value of 7.2 percent to -11.0 percent under the FairTax. As another example, compare the current 24.0 percent remaining lifetime average tax rate of a married age 45 couple with $100,000 in earnings to the 14.7 percent rate that arises under the FairTax."
Further,
(From study: http://snipurl.com/kotftmacromicro ) "...once one moves to generations postdating the baby boomers there are positive welfare gains for all income groups in each cohort. Under a 23 percent FairTax policy, the poorest members of the generation born in 1990 enjoy a 13.5 percent welfare gain. Their middle-class and rich contemporaries experience 5 and 2 percent welfare gains, respectively. The welfare gains are largest for future generations. Take the cohort born in 2030. The poorest members of this cohort enjoy a huge 26 percent improvement in their well-being. For middle class members of this birth group, there's a 12 percent welfare gain. And for the richest members of the group, the gain is 5 percent."
Posted by Mel (anonymous) on January 6, 2008 at 3:49 p.m. (Suggest removal)
Mr. big company makes much money, (long time ago). The federal gov't says we will tax you much. Mr. big Co. says we will just pass the cost on to the consumer. The gov't says we know that, but if we tried to tax the average guy this much they would revolt. (true)
Wouldn't it be nice to NOT have to file all that paper work every year? Taxes are the biggest reason for inflation. Everything you buy has loads of hidden taxes. It seems that the gov't never has enough.
Posted by jafo (anonymous) on January 6, 2008 at 11:44 p.m. (Suggest removal)
Just trying to understand the FairTax thing. The poorest would pay nothing, the middle class would pay less, and no more corporate income tax??? So, where is the money going to come from to run our country??
Posted by Dewey715 (anonymous) on February 6, 2008 at 9:06 p.m. (Suggest removal)
jafo - The money comes from the broad base. Many people do not pay any tax today but will under the FairTax. The IRS admits to $300 Billion uncollected taxes each year, and that's just the part they admit. The 50 million tourists who come here each year will pay the tax.
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