Posted on 12/24/2007 7:55:05 AM PST by Alex Murphy
WASHINGTON — Mike Huckabee, one of the most conservative Republicans in the 2008 presidential race, has embraced one of the most radical ideas on the campaign trail: a plan to abolish all federal income and payroll taxes and replace them with a single 23% national sales tax.
The idea -- dubbed the "fair tax" by proponents -- has been a political asset for Huckabee; its well-organized backers have helped catapult him from the back of the presidential pack to its top tier.
Sales tax proponents have tapped into seething voter hostility toward the Internal Revenue Service to become a below-the-radar political force, popping up at campaign events and candidate forums in Iowa and elsewhere.
The efforts on Huckabee's behalf by sales tax advocates helped spur his surprise second-place showing in an August Iowa straw poll -- the breakthrough that marked the beginning of his rise in the state and nationwide.
He is the only major presidential candidate to make the idea central to his campaign. "The first thing I'd love to do as president: Put a 'going out of business' sign on the Internal Revenue Service," he said at one debate.
Some wonder, however, whether his embrace of the plan eventually could turn into a liability.
The sales tax proposal has been around for years but languished on the fringes of practical politics and policy. Tax professionals generally regard the idea as impractical, regressive and even "crackpot," as one critic puts it.
It has gone nowhere in Congress. The 2005 Presidential Advisory Panel on Federal Tax Reform soundly rejected the idea. And many politicians shy away from it because it is easy for opponents to portray it as a huge tax increase -- as Democrats did in a 2006 Senate race in South Carolina.
(Excerpt) Read more at latimes.com ...
Retail sales today are taxed 'exclusively', as you call it. Everywhere, in every case bar perhaps some special offers occasionally.
If the proponents were not intending to deceive -- which they are, the 23% figure is a fantasy at retail -- they would quote the honest tax rate and state the proposal in a manner consistent with everyday retail sales practice.
The best way to analyse anything is to begin by stating the proposition honestly. Joe Citizen doesn't think in terms of markup, or 'inclusive' tax rates as you would have it.
Anyone who thinks that the Regress can't and won't game this alleged 'fair tax' at least as badly as the abominable income tax as now operated, is the sorriest and most naive SOB possible. Why substitute one shell game for another, until the 16th Amendment is repealed, eh?
Because if you don't repeal the 16th for starters, you will, sure as the devil, wind up with both an income tax and a sales tax. You think not? Rubbish -- when have the Regress ever failed to impose another tax when they could get away with it? Right. Never. To believe otherwise is simply to be purblind.
Were I you, I should be quite wary of accusing someone of a lack of understanding. This seems to be a bit of projection on your part.
Not understand it? I understand both it and the means being used to promote it all too well, and the ultimate result of imposing it, too. Don't flatter yourself, boyo.
How are income tax rates stated, boyo? Payroll taxes? Estate taxes?
pfffft
It would be the very first sales tax calculated and displayed as tax inclusive.
That’s why many are convinced that is being deceptively marketed as a tax inclusive sales tax, because the percentage sounds lower that way, and no other sales taxes are calculated that way.
Income taxes are calculated as tax inclusive because all the money you use to pay the tax is included as part of your gross income, and if you paid your income tax with money that was tax exclusive, that money would also be considered to be part of your income, making it tax inclusive.
Sales taxes, OTOH, are ALWAYS calculated as tax exclusive because the tax you pay is in addition to the price you pay for the items or service.
The so-called Fair Tax is being deceptively marketed, and this is one of the deceptions being used. The fact that the Huckster is on board with it is a further indication of the deception being used.
To be revenue neutral it would really have to be around 28%.
They should just say it's a 29.87% rate, because everyone will see the $100 price on the receipt and the $29.87 tax on the receipt. But they try to be cute.
But the rate is not deceptive but to those who wish it to be.
If you think it is deceptive, fine. I sure don't. I use both rates, total tax, effective rates, etc to compare.
Anything which increases costs in a business can accrue to only three places or any combination thereof.
1. They can reduce the ROI of the owners of the business.
2. They can reduce the wages and benefits of the workers who actually produce the good or service. or
3 They wind up in the price(s) of those goods and services.
Where is the most likely place for them to go?
People would stop buying taxed items in record numbers. Doesn't matter if you eliminate FICA and income taxes (good luck trying). 23% would shock most civilians at the cash register. It wouldn't eliminate state sales or income taxes either.
The version of the Fair Tax I read included the tax on home purchases, but only if they were for a residence. The tax did not apply to investment property. The short term effect would be a collapse of housing equity for sellers with a huge price increase for buyers.
Badly, and in a manner designed to deceive.
Rather like the fair tax proposition, come to think of it.
If a principle argument of yours is something along the lines that, ''We define rates just like the IRS (or more simply, or however you choose to frame the comparison)'', then that's no argument at all. Somewhat like saying, ''See, dying of dysentery isn't any worse than dying of typhus.''
pfft, yourself. Your first sentence was spot on, until you added the last two words.
Ta-ta.
In theory you are correct. But how many years since 1913 has the US Government opted out on their power to exercise the Income Tax? Before we give the Feds a sales tax we MUST remove their ability to tax income. They absolutely will double dip.
“The economy would grind to a halt”
All taxes are paid by the people, the only question is how. A sales tax with a import tax would put the tax out in front for everyone to see.
This also makes the government have to rase taxes on all the people at the same time thus stopping the “pick on one group at a time” system that is now in place.
The big lie of the income tax is that it is hidden. Put it out for everyone to see.
If you are low income and need help then go the gov and prove to them your income , there is no real reason the government need to know my exact income.
Huck is still not my guy but some kind of fair tax is a great idea.
For ‘principle’, please read ‘principal’. Apols for the typo.
If you eliminated the idiot supporters who can't run the numbers, the FairTax wouldn't even be a blip on the radar.
You optimist, you!
Merry Christmas, m'friend, and best of the New Year to you!
I'm pretty weak in Economics, but it strikes me this would be true for lower priced houses and not for higher priced homes. The former are being purchased by people not paying Income Taxes today. The latter are being purchased by people already paying high income taxes and they will have a net tax reduction.
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