Huckabee campaigning for 23% sales tax

The Los Angeles Times ^ | December 24, 2007 | Janet Hook

[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.

[baybabe]

... and while you’re at it, how about electing the Tooth Fairy as President???

At least the FairTax is do-able.

[baybabe]

Perhaps you don’t know anyone who is in danger of foreclosure on their home or who has been recently “downsized” or “off-shored” out of a job (or some combination thereof). I do.

Get YOUR head out of wherever it is and see what’s happening. I think it is imperative that we help boot our exporters abilities to compete with entities in other countries and the FairTax certainly help that (among many other benefits).

[baybabe]

If you go back in these threads you’ll see that your like-minded compadres have agreed that there would be a 9% price reduction as a result of the FairTax. Some of the proponents think it would be more, but even 9% would be a massive help to most people.

[baybabe]

None of your post offers accurate information. Why do you continually put forth such distortions and misinformation?

[baybabe]

Maybe you could explain how that is revenue neutral.

That's been thoroughly and professionally covered in detail by very respected economists and I'm sure you know since you have been active on the threads that presented the revenue neutrality economic papers.

It may be that you don't grasp what those papers say, but they are certainly more definitive than your horseback assessments (which are actually very off base and misleading).

[Toddsterpatriot]

You didn't get what I asked you.

Yes, I did.

Calculate your tax due if you took everything to market right now.

In my taxable accounts I'll owe 15% on my long term capital gains.

Your tax defered investments will owe tax, your things that you've traded in the past year in your taxable account won't. Either way... calculate your tax due if you took all of it to mark to market.

And that will make 30% somehow smaller than 15%?

Compare that against Huckabee's 23%. 23% of the entire value.

30%. Not 23%.

Now put the entire value on a complete spend decline of 15 years (65 to 80).

And that will make 30% (not 23%) somehow smaller than 15%? That will make me feel better about the original investment being taxed at 30% instead of 0% in my taxable accounts?

[kjam22]

Sorry, but you can’t really do it on the back of an envelope. If you really want to argue it, and sound like you know what you’re talking about. Put your stuff in an excel model. Run some real numbers, and then get back with us.

[xcamel]

Tax reform it “doable” - the fairtax will never fly.

[Toddsterpatriot]

Sorry, but you can’t really do it on the back of an envelope.

30% is higher than 15%, on an envelope or not. 30% is higher than 0%, on an envelope or not.

Run some real numbers, and then get back with us.

I did run real numbers. 30%>0%, 30%>15%.

[baybabe]

What percentage of your income can you legally write off under the income tax?

And how does the FairTax “screw you” (or anyone else)?

Please offer some specifics.

[mysterio]

Huckabee campaigning for 23% sales tax

It's 30 percent.

[xcamel]

You think the fairtax will cure cancer too? Just Damn...

More jobs have been "in-sourced" to the US than outsourced - look it up. The "mortgage crisis" ?? unqualified people signing up for bad loans?? Not my problem. Downsizing, again, anyone with a brain should be able to see when their job might not be around in the near future. You seriously think none of this has happened before?

The FT does nothing to "solve stupidity" - if anything - it will exacerbate it.

[baybabe]

You are only taxed when you spend for consumption - and far and away every expenditure is NOT consumption. To see some of the things that are not, check post #282.

All of those things go to reduce your effective FairTax rate - the rate you actually pay each year (and it’s far, far less than the 23% - or 30% - number used by those who wish to retain the present system).

[xcamel]

Please tell everyone what is distorted about those statements...

Oh yeah... you can’t.

[baybabe]

... and keep in mind, investing that “money saved” still keeps it saved and provides you with an income stream (which is not taxed - unless spent for taxable consumption).

The opponents of the FairTax invariably pretend that you spend everything you make and that everything you spend it on is taxable. That’s not true. Ask yourself why they might do this.

[kjam22]

okay.... look at this way. Say you have 1,000,000 right now. Half of it is pre-tax taxable at 15%. The rest is tax free. Your tax liability right now is 75,000. Suppose Huckabee is elected and implements his tax plan. 23%. You spend all of it 15 years. You will have paid $230,000 in taxes. But you also invested it from day one at 5% apr. You draw 5% (a conservative number) on only what you have left over the next 15 years. Your investment makes you 350,000 tax free dollars, to give to your kids, or do whatever you wanted to with.

Which would you rather have?

[Toddsterpatriot]

You are only taxed when you spend for consumption

You bet. My current, already taxed savings would be taxed again when I spend it under a consumption tax.

All of those things go to reduce your effective FairTax rate - the rate you actually pay each year (and it’s far, far less than the 23% - or 30% -

Is it less than the 0% I'll pay now when I spend my savings?

[Kellis91789]

“Of course no one likes it. However, the last time I saw anything approaching seething voter hostility was in 1992. Arguably, even then, voters were seething about many issues. If there truly was seething voter hostility out there, we would have had change by now.”

The problem is that the people paying the taxes are too genteel to march in the streets. The poor and lower middle class aren’t paying much in Income taxes, and don’t worry much about the IRS. All attempts to ‘untax’ the poor are bad ideas. It only encourages them to vote for wasteful government spending. All benefit at no personal cost. What sort of idiot thinks that can go on forever ?

[baybabe]

If you’d spend some time on the FairTax website or even on some of the numerous examples on prior threads showing the increase in purchasing power brought about by the FairTax you could see it’s not just me saying this.

It’s demonstrated clearly by numbers in comparison to the income tax.

Actually, you’d do well to use one of the FairTax calculators to find out honestly what your effective FairTax rate would be. You might then very well "sign up".