Huckabee’s Fair Tax Plan
This is from a post by Nancy Scola.
The American Prospect’s Ezra Klein took a look at Mike Huckabee’s FairTax plan and came away as summarily unimpressed as I was. Again, there are three main bullet points to the Huck’s economic plan: (1) abolish the IRS, (2) impose a sales tax in the neighborhood of 30%, and (3) issue each and every American a monthly “prebate” check to render basic living expenses tax free. (I think Ezra is being too casual in dismissing prebates as “a minor…scheme that’s not really worth going into.” To start, it seems to me that we the people have a legitimate interest in which government agency President Huckabee will have us depending on for our monthly living stipends.) Guided by smarter economic minds than mine, I’m not entirely unconvinced that a hefty consumption tax couldn’t possibly work in this county. But there’s no sign anywhere that Huckabee himself understands his plan enough to actual lead its responsible implementation. Maybe Chuck Norris is working on a detailed policy package. Dunno.
READ FULL POST at Nancy Scola’s Blog
Comments
Comment from Tkrop
Time: January 19, 2008, 12:29 pm
First off, the FairTax is NOT Mike Hucabee’s plan. He’s just smart enough to see the benefit it would be to all phases of our economy. “Taking a look at the FairTax” by Nancy Scola and Ezra Klein must have amounted to reading the cover.
To say there is no sign that Huckabee understands the plan is pure B.S. It’s the media that doesn’t want the public to learn about it, and to understand it.
It is sad that so many people in this country can not see the forest because the trees are in the way. Ther is NO substance at all to what Nancy has stated here. Logging onto http://www.fairtax.org will sho just how wrong she is.
Comment from DavidFL10
Time: January 20, 2008, 12:15 pm
My letter to Ezra:
I had been anxiously awaiting your analysis of the FairTax, but I am extremely disappointed as I read this. You focused exclusively on the negative. Why in the world would you do that? You briefly mention the most important part of the proposal in parentheses in the second to last paragraph. You write, “save for a complicated a minor “prebate” scheme that’s not really worth going into” as though you aren’t sure if it is minor or complicated. That shows either you don’t understand or you are blatantly lying about it.
My philosophy and the major reason I support the FairTax is because I don’t believe a family should pay even a dime towards the federal government until they have been able to pull themselves out of poverty. The prebate has the affect of COMPLETELY untaxing the poor.
Our current system taxes them to death-literally in many cases-in three ways. Payroll taxes begin at the very first dollar a person earns and represent a loss of 7.5% of the gross pay or 8.1% of the amount a person has left to spend after tax has been taken out. Every honest employer must match that “contribution” and every reputable economist agrees that diminishes the actual amount of compensation the employee receives. Because corporate taxation, payroll taxes, and other compliance costs drive all prices up in this country (probably not by the 22% number thrown out by most Republican FairTaxers, but to undeniably to some degree), every purchase a poor person spends has some amount in it that is a direct result of federal taxation.
The FairTax eliminates the payroll tax, the matching tax, and to some extent the embedded costs in products purchased. The prebate reimburses each family for the tax they will pay up to poverty level spending. I am saddened that you would report your findings to us while glossing over that aspect as complicated or minor.
David
Comment from John
Time: January 19, 2008, 10:34 am
The FairTax is a well documented and researched plan which has been in congress and gaining support see Fairtax.orgfor complete info. There are 2 government organizations involved in the prebate, both already exist. the dept of health and human services will set the poverty level spending for each family size which is used to calculate the size of the prebate, and the social security administration will be issuing the checks via a debit card, check or direct deposit.
The biggest reason the high tax rate will not be a problem, is one which most people including some so called experts can’t understand WE ALREADY PAY IT!! The cost of everything we buy has a hidden tax that is estimated to be between 20 and 30 percent, this hidden tax is the combined taxes of every company that touched the product in the manufacturing and delivery process up to the point where you purchase it which means when imbeded hidden taxes are removed and Fairtax added the worst outcome is a 2-3% rise in cost not 30%. Another aspect that will reduce the sting of a high sales tax is that fact that ther will no longer be any federal taxes withheld from your paycheck which include social security and medicare taxes which amounts to a 20-30% raise in takehome pay. YES, we get to keep ALL the money we earn and choose how we spend it. The best news for the middle class and frugal folks such as myslef is that USED items are NOT taxed. Then on top of all this there is the prebate which is based on family size not income, which will add anouther $580 to the income of a family of 4(2 adults,2 children).
The benifits of the FairTax are far more than what I mentioned here if you need more info check out FairTax.org