Dec. 28, 2007
"FairTax" Boosts Huckabee, Despite Critics
GOP Contender's Support For Questionable National Sales Tax Drawing Supporters
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Republican Presidential hopeful, former Arkansas Gov. Mike Huckabee, left, greets supporters after speaking at a rally at the Pizza Ranch in Pella, Iowa, Friday, Dec. 28, 2007. (AP)
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To former Arkansas governor Mike Huckabee, supporting a national retail sales tax is more than a policy proposal. It has provided much-needed muscle for his campaign, filling rallies and events with fervent supporters hoping to replace the entire income and payroll tax system.
There's one problem: A national sales tax won't work, at least not according to tax experts and economists of all political stripes. Even President Bush's Advisory Panel on Federal Tax Reform dedicated a chapter of its 2005 final report to dismissing such proposals.
"After careful evaluation, the Panel decided to reject a complete replacement of the federal income tax system with a retail sales tax," the panel said. It concluded that such a move would shift the tax burden from the rich to the poor or create the largest entitlement program in history to mitigate that new burden.
Under the proposal, known to supporters as the FairTax, the Internal Revenue Service and the entire income and payroll tax system would be abolished. Americans would then pay a sales tax on virtually everything: a new home, yard work, food, health care. Only education would be broadly exempted.
FairTax advocates say a 23 percent tax rate would maintain the same amount of money flowing into the Treasury, though that number is debatable. An item priced at $1 would actually cost consumers 30 percent more, or $1.30. FairTax advocates say that amounts to a 23 percent rate, because 30 cents is 23 percent of the product's after-tax cost of $1.30.
To offset the burden on the poor, the FairTax system would send monthly checks to everyone in the nation, compensating for taxes paid up to the poverty level and ensuring that some minimum standard of living would go untaxed. The president's tax overhaul panel, in its final report, estimated that such a program would cost $600 billion to $780 billion a year, making "most American families dependent on monthly checks from the government for a substantial portion of their income."
But the biggest criticism is that the tax cannot be administered. Many economists say a black market would develop overnight, especially in the service sector.
"Under the FairTax, every time you purchase a service, you would probably get two prices -- one you can pay with a check or credit card that includes the FairTax, and one you can pay in cash and save 23 percent," conservative economist Bruce R. Bartlett wrote this week in the publication Tax Notes. "Because there would no longer be any audits of income, since the IRS would have been abolished . . . massive evasion is inevitable."
At the same time, federal spending would shoot up because the government would have to pay sales taxes on purchases. To compensate, the sales tax rate would have to rise to more than 40 percent for the government to take in as much as it does now, said William G. Gale, a tax economist at the Brookings Institution. State and local governments, facing a new burden on purchases, would have to increase taxes to maintain current levels, as well.
To Huckabee, there seems to be no downside to a national sales tax. By eliminating federal income and payroll taxes, businesses would save considerable sums and pass on the savings. The FairTax would lower the cost of retail goods, make U.S. companies more competitive internationally, send the economy into overdrive and even encourage thrift, since the national sales tax would apply only to new goods.
"Am I running for president to shut down the federal government? Not exactly," Huckabee says on his Web site. "But I am running to completely eliminate all federal income and payroll taxes. And I do mean all -- personal federal, corporate federal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment. . . . Instead we will have the FairTax, a simple tax based on wealth."
Once an advocate of a single, "flat" income tax rate, Huckabee was converted by FairTax advocates who peppered town hall meetings while he was governor. Now, FairTax supporters pack events to cheer him on. A May rally in Columbia, S.C., attracted about 10,000 FairTaxers, who cheered rapturously when Huckabee declared: "I realize that the FairTax organization does not endorse candidates, but let me be very clear: I endorse you."
Nonetheless, FairTax's detractors are legion. In Tax Notes, Bartlett spent 15 pages attacking the proposal and its advocates, whom he accuses of being ignorant or dishonest. Dale W. Jorgenson, a Harvard University economist and elder statesman on tax overhaul, called the FairTax "reform by focus group."
"These people have to be taken seriously," Jorgenson said of the organized campaign for the FairTax. "They're not terribly experienced in politics. But they have this grass-roots movement out there. They have cornered the market, and nobody in the political world is out there saying this is nuts."
Alvin Rabushka, the father of the flat tax and a senior fellow at Stanford University's Hoover Institution, said anyone who professes to be an independent businessman or contractor would label every purchase as a wholesale transaction or business necessity, because business-to-business purchases would not be subject to the tax.
"For me at least, a national retail sales tax is an attractive idea," Rabushka wrote on his blog this month. "Only fools pay retail."
Charmaine Yoest, a Huckabee spokeswoman, said that all tax systems have their flaws, and that Huckabee would address issues of compliance as president.
In all these criticisms, FairTax advocates see sour grapes. Ken Hoagland, a spokesman for Americans for Fair Taxation, said Bush's tax panel was headed by tax lobbyists, including former senators Connie Mack (R-Fla.) and John Breaux (D-La.), intent on maintaining the current system and their livelihoods.
As for Rabushka, a hero in many conservative tax circles, "This is a guy who's been trying to sell an idea on tax reform for years and gotten nowhere with it," said David G. Tuerck, an economist at Suffolk University in Boston and a FairTax advocate. "He's showing some signs of panic, now that we've got at least one serious presidential candidate backing us."
By Jonathan Weisman
© 2007 The Washington Post Company





This is really getting crazy. It''s bizarre to think we can solve the problem of the indolent corruption permeating our system by lowering taxes on the most corrupt.
"For me at least, a national retail sales tax is an attractive idea," Rabushka wrote on his blog this month. "Only fools pay retail."
So Huckie trots out one of the ultra-Righties from his sinecure at the Hoover Institute, aptly named after the president most responsible for the Great Depression, to promote this ridiculous scheme. Of course the Darth Bushit crowd and their puppet masters want to keep their billionaire constituency from paying taxes! Only fools pay retail?--the billionaires can buy it all offshore when they visit their mansion in the Cayman Islands. Only you poor peasants will be picking up the slack for Bushit''s billionaires, the folks Huckleberry is now sucking up to, every time you buy groceries.
Suckie this, Huckie!
In 2004, the IRS had +- 115,000 employees. That''s a lot of jobs to do away with. I guess some of them would be shifted into other government positions to administer the entitlement programs associated with sending "monthly checks to everyone in the nation". Interesting that a political party that often and loudly decries entitlement programs wants to create an entitlement program for the entire nation.
What about all of the other jobs associated with the chain tax preparers? H & R Block, Jackson Hewitt, etc. and the little mom and pop companies all over the nation? Lots of unemployment potential there.
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yikes.....thats reason enough not to vote for this biggot!!!
I did not say that it was. I was pointing out another consequence of moving to a national sales tax.
How is it to be implemented? Overnight? Hundreds of thousands of people find themselves without jobs when they wake up tomorrow?
I would think there would be a phase-in time. Which means that they would phase in a "small" national sales tax while keeping some of the income tax and all of the "unproductive" employees you speak of to administer the remaining income tax program.
Then, lo and behold, they would decide not to do away with an income tax but also to keep the new national sales tax.
And the special interests would remain pushing to have their products and services exempt from the national sales tax. Why should food and medicine, necessary for survival, be subject to sales tax? Then we get into fuels. Fuels are necessary to survival in order to heat the home, cook the food, commute to work. Why should fuels be subject to sales tax? And clothing. Clothing is necessary to survival. Why should clothing sales be taxed?
~Under the proposal, known to supporters as the FairTax, the Internal Revenue Service and the entire income and payroll tax system would be abolished. Americans would then pay a sales tax on virtually everything: a new home, yard work, food, health care. Only education would be broadly exempted.~
Some of my assumptions are, admittedly, conjecture. If the IRS is abolished, where do those people find jobs? I guess administering the national entitlement program also mentioned in this article:
~To offset the burden on the poor, the FairTax system would send monthly checks to everyone in the nation, compensating for taxes paid up to the poverty level and ensuring that some minimum standard of living would go untaxed.~
If the FairTax system seeks to mitigate the burden on the poor, why would monthly checks be sent to everyone in the nation?
You could have saved me some time by just admitting up front that you are not talking about "ordinary people" in the sense of a representative sample of the general population, but rather, you mean "ordinary Hucksterbee supporters".
Ask the people of his home state of Arkansas if you want to know what the average (ordinary) person thinks of Hucksterbee. Read the AK Times if you want to learn about some of the things Hucksterbee did to arouse their ire.
Religious nutjobs: No Thanks!
Repressive Tax Schemes: No Thanks!
Hypocrites Who Oppose Stem-Cell Research but Take Money From Those Who Do The Research (Novo-Nordisk): No Thanks!
Governors Who Secretly Work To Parole A Rapist Who Then Rapes And Murders When Set Free: No Thanks!
Criminals Who Wipe and Crush $335,000 Worth Of Government Computer Hard Drives to Hide Embezzlement of $60,000 Yearly: No Thanks!
"Christians" Who Proclaim Their Religion To Get Votes: No Thanks!
etc... (I could go on for a loooooooong time!) There''s just SO MUCH about Hucksterbee to dislike.
http://www.politico.com/news/stories
/1207/7602.html
ronpaul2008
Well the "fairtax" is for idiots; and certainly isn''t a tax on the rich.
In the first place, you can only tax a renewable resource; aka a profit making enterprise; which is what income is.
So think about all of those retired folks who have paid income taxes all their lives, and managed to save some for themsleves for retirement (even their savings interest were taxed). So now their income is zero, so their taxes should be zero, but now "Huckabaloo" has a new plan to tax what they have left every time they spend some. The rich don''t pay income taxes, nor do they spend what they have; most of it is invested in non-taxable enterprises.
So I can just see the old folks in Florida jumping at the fairtax. Ron Paul and his sheeple are Utopians with no common sense, and Huckminster is just as nutty.
The only fair tax is a flat tax on all income, and nothing else; no ifs, ands or buts.
It would be a logistical and economic nightmare!
Just shave off some more of the income tax and increase the estate and windfall taxes to compensate. People should keep more of what the EARN as opposed to what they WIN.
(Inheritance is a form of "winning" by the way. If you are born into wealth... you''ve won the lottery of life. Just ask Paris Hilton, Steve Forbes, or the Trump kids).
I thought Republicans hated taxes? Money for nothing and the chicks for free, I suppose... Repubs are right on a lot of things, but for once, it''s not regarding taxes. Ironic, isn''t it?
Okay, that''s not so bad then. Nice to see such things mentioned. Mr Huckabee, Please accept my apology for my rash thinking/oversight/not reading. Though I''d also admit, why include "everyone"? I''ll agree there''s such a thing as "too much tax", but should "too little" be a factor, especially when we have this national debt and how some wouldn''t even notice an extra nickel coming out of their coffers?
I dunno; but in theory the practice in general is a good one.
Similar to Bill Clinton in some remarkable ways (not including their politics) will he also make it to the White House?
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I just saw this comment on the politics page. Who ever wrote that blub must be either insane, or the dumbest reporter alive. The only thing similar between Clinton and Huckabee is that they are both from Arkansas and they both need to watch their weight. Other than that, they are about as much alike as GWB and a Nobel laureate.
If you make the money it''s taxed! I''ve been taxed that way all my adult life!
No they wouldn''t, the tax is already included in your current price because a healthy chunk of the price you pay for say a product are the exact taxes that would be waived from the producer/manufacturer and the retailer. These guys already pass the ''savings'' along to the consumer. In short, the 23% is already included in today''s sales because of the imposition of those same taxes on those on whom you purchase from.
You bet your sweet bippy. This sounds like a panacea to some, but they fail to comprhend that a good number of people will avoid paying taxes on services and no one will be there to enforce evasion.
Which will increase the percentage of the tax rate which will lead to even more evasion.
It''s a fool''s solution. And only fools think it''s a practical solution.
If you make the money it''''s taxed! I''''ve been taxed that way all my adult life!
Posted by RowdyTexan2 at 12:05 AM : Dec 29, 2007
What you''re describing is called a "flat tax", and is far supeior to Huckabee''s proposal.
It''s just another republican scam to put thousands of people on the streets vying for your $8.00 flipping hamburger jobs!
It was established, as a result of the great depression, as a Security wall for retired senior citizens.
Social Security is a national retirement-insurance program, financed, MANDATORILY, by fees deducted directly from employees paychecks, or by quarterly estimates, paid in advance, by the self-employed.
I, like every other working American have paid into the Social Security program all my working life. I have, fortunately, lived long enough to receive benefits, while others like me paid SS taxes all their lives but died before reaching retirement age. That is what makes it a workable INSURANCE program instead of welfare.
Instituting a national sales tax and eliminating the, IRS collected, income tax, will effectively end social security as an insurance program and turn it into an absolute welfare program.
It will then be eliminated, just like so many private corporations, supposedly guaranteed, retirement programs have been.
This brain-dead scheme of Huckleberry''s would encourage massive cheating. Anyone and everyone would now be in "business", buying supplies for their "business" and avoiding the tax. Example: "I''m in the rabbit raising business and all that caviar I bought is to feed my rabbits."
Only you poor *** who have to buy groceries at the Piggly Wiggly and clothes at retail will bear the huge tax burden, while the billionaires avoid any taxes whatsoever, as they buy their groceries in France and have them flown in on the Concord.
Posted by gkc99
That''s why so many countries have went to a value added tax, they have found that once a sales tax reaches a certain level (certainly less than 23%), there are massive amounts of sales tax evasion going on.
What is really required is a clean up of BIG government and true fiscal reform.
To quote Congressman Ron Paul ~ "Real conservatives have always supported low taxes and low spending. Real conservatives have always supported low taxes and low spending.
But today, too many politicians and lobbyists are spending America into ruin. We are nine trillion dollars in debt as a nation. Our mounting government debt endangers the financial future of our children and grandchildren. If we don%u2019t cut spending now, higher taxes and economic disaster will be in their future %u2014 and yours.
In addition, the Federal Reserve, our central bank, fosters runaway debt by increasing the money supply %u2014 making each dollar in your pocket worth less. The Fed is a private bank run by unelected officials who are not required to be open or accountable to %u201Cwe the people.%u201D
Worse, our economy and our very independence as a nation is increasingly in the hands of foreign governments such as China and Saudi Arabia, because their central banks also finance our runaway spending."
I''m voting for Ron Paul in the Feb 5th New York state GOP primary.
Roosevelt policies balanced with regulated capitalism produced the strongest nation and strongest middle class the world ever knew. Self serving arrogant narcissistic elitist anti-social non-visionary fools are in the process of destroying it.
A person born in the late 1930''s in the United States enjoyed the best era that any working class person will ever hope to live in this world. Not one republican can be thanked for this.
Posted by rmsdm4
It never ceases to amaze me, the twisted mind of the "liberal" hating whack jobs like you.
So divisive, so hateful, so offensive, so assuming. How dare you and the likes of you insult the citizens of the United States. Many of those you attack are dying in Iraq as you write your right wing trash. Many who are called "liberals" by the fascist fools in this nation have contributed immensely to this nation.
You do not own the flag, you have not single handedly made this a great nation. Your trash has brought it to the state it is in now. You undoubtedly voted for this thing in office.
True patriots need to take this country back from those who parade around bullying with words from their back *** with the United States flag draped about them. Many of these have committed high treason against this nation and its people.
---%u201CI don%u2019t give a *******,%u201D Bush retorted. %u201CI%u2019m the President and the Commander-in-Chief. Do it my way.%u201D
%u201CMr. President,%u201D one aide in the meeting said. %u201CThere is a valid case that the provisions in this law undermine the Constitution.%u201D
%u201CStop throwing the Constitution in my face,%u201D Bush screamed back. %u201CIt%u2019s just a ******* piece of paper!%u201D
CBS online news censored the word "o*rif*ice"
This is just what we need, big business NOT having to pay any taxes. THEY DON''T PAY TAXES NOW! They live out of their businesses like royalty and claim NO profits to be taxed!
The only fair tax is a flat tax on EARNINGS! If you earn it, pay taxes on it, with no loopholes, write offs, or deducations!
Anyone who has actually looked at the fair tax knows their are many more positives then Negatives.
They talk in the article about how their would be a black market for things like yard work. Well guess what there already is now.
Jonathan Weisman is a Ignorant fool
For those of you who are doing "just fine economically" now, check out what FOOLS we really all are! Right wingers, Liberals, and All Americans could be "REALLY DOING JUST FINE" if not for what our wonderfull self serving polliticos have been allowing to be perpetrated on "US" the American public for decades! We''re in total servitude & have been for decadws! Go ahead, I Dare you to go to this Link & Discover the Real Truth! Do you have the nerve to discover what kind of Gov''t we really have? Go then. Just learn & enjoy, then puke figuring the tax money that has been "STOLEN" from all of us. Then copy & paste this link in all of your e-mails to start a grassroots effort to end this *** & reclaim our country. Go here for the real truth about our Gov''t, Good ol Boys & Girls Club. (Dems & Reps) alike. http://www.youtube.com/watch?v=3ueEfRXZCVA
Go- Go-Go-, Ron Paul baby!!
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by gfuss2
December 30, 2007 5:09 PM PST
- Guys, Gals, For those of you who are doing "just fine economically" now, check out what FOOLS we really all are! Right wingers, Neocons, and All Americans could be "REALLY DOING JUST FINE" if not for what our wonderfull self serving polliticos have been allowing to be perpetrated on "US" the American public for decades! We''re in total servitude & have been for decades! Go to this Link & Discover the Real Truth! Do you have the nerve to discover the kind of Gov''t we really have? Just learn & enjoy, then puke figuring the tax money that has been "STOLEN" from all of us. Then copy & paste this link in all of your e-mails to start a grassroots effort to end this *** & reclaim our country. Go here for the real truth about our Gov''t, Good ol Boys & Girls Club. http://www.youtube.com/watch?v=3ueEfRXZCVA
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See all 49 CommentsGo- Go-Go-, Ron Paul baby!! I''ll Definately Vote for you, (the only Honest face running!) All the rest are a bunch of "self serving" Liars & Crooks! They''re all = Dems & Reps, BEHOLDIN to Big Oil, Big Pharma, Humongus Insurance, lining their pockets, etc! Maybe we "thru - you" Ron Paul can save our country from all the rest of these Corrupt Power Hungry Politicos. Good Luck Ron Paul. Discover the Tyranny perpetuated on the American people for so many yrs! The "powers to be" NEED a Grass roots movement as the to even begin to put enough pressure on our "howdy doody" gov''t (puppets)to feel the desire of the people to be able to cut these strings of sevitude that has existed for so long.