Mike Huckabee and the Fair Tax

Mike did a great job in the debate last night to explain the fair tax.  I hope it draws some interest in people.

Read about it at www.fairtax.org

Or on Mike’s website

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6 Responses to Mike Huckabee and the Fair Tax

  1. Mark says:

    The Fairtax is a great theory . I sure wish Fair tax would work, we need something.

    But Fair tax has profound and basic flaws, which are so damaging that it couldnt possibly survive the first three months — nor should it.

    Fair tax would have profound unintended consequences. Particularly to those who require very much health care, or the older population who retired.

    Fair tax would also decimate variouis parts of our economy. It wouldnt come close to bringing in 2.4 trillion, and it would cause major disruptions that would be worse than this idiot income tax system we now have.

    The embedded taxes is probably the most overstated aspect ofthe FT. Many businesses dont have near the embedded taxes that would be released in a way that the comany could lower their cost 22%. In fact, while embedded taxes are very real, the portion that could be passed on in lower prices is less than 8%. There is a huge fundamental flaw in the math and logic.

    Furthermore,I believe Boortz and Linder are very aware of some of these things and hope no one calls them on it.

    Basically, a high sales tax — enough to gather 2.4 trillion dollars — would have to be much higher than 23%. In fact, it would have to be 50-60%. Here is why.

    Huge segments of the economy would get exemptions. Nursing homes for example. Also, car manufacturers, military spending, renters, new homes.

    Boortz HAD to include those segments – cause without taxing them, there just isnt enough to tax to get 2.4 trillion.

    For political and logistical reasons, you jsut cant tax the military 300 billion in sales tax. Health care is 2 trillion dollars – they will RIGHTLY get exemptions, and thats 460 billion more you are shy. With just two exemptions — FT is short almost 800 billion dollars. And there are more problems.

    For more explanation – visit fairtax absurdity.blogspot.com

  2. fortyfour says:

    Thanks for taking the time to comment.

    There will never be a perfect tax system. But, in yesterday’s mail, I started receiving my tax forms. I received my copy of TurboTax. One of the forms I received was a state income tax refund statement for 2006. The form tells me that I may need to count the refund as income.

    I recently moved to Michigan. Despite a highly skilled workforce, significant infrastructure, we have the HIGHEST unemployment in the US. What makes you think that the state goverment of Michigan is capable of operating an efficient organization that executes a complicated tax structure?

    I’m sure you are aware that the IRS is not capable.

    Our current tax system is UNFAIR. It discourages productivity and that one of the last Manufacturing criteria we lead.

    Explain why we need a sub-economy supported by our tax structure???

    I cannot quote tax rates for businesses. But, it is significant, and it costs businesses to figure out how to pay them. I have friends in small business that have quit, citing tax law as a major reason. WHY?

  3. fortyfour says:

    S.Forbes first pushed sweeping tax reform – the flat tax. It fell with a thud along with his candidacy.

    Huckabee’s efforts have raised the bar. His is the only current candidate that has challenged the system. We need something new, less complicated and less burden on the producers in the workforce.

    I work in a company that has facilities worldwide. The US government has allowed tax laws and trade agreements that put burden on the US portion of the business. A simple example is the US division of my company absorbs 100% of the international overhead because of German laws.

    Something HAS to change. It may as well start with Taxes.

    Ask yourself – why do people move to Florida? NO INCOME TAX.

  4. Gov. Huckabee’s advocacy of the FairTax ( snipr.com/irsgone ) is the single most important policy position in this election. Research findings explain why:

    The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces [BHKPT] ( snipurl.com/whatratewks ).

    The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan [THBP] ( snipurl.com/baserate ).

    Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case [THBNP] ( snipurl.com/realwages ).

    The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be [ALM] ( snipurl.com/econbenes ).

    Consumption benefits [ALM] ( snipurl.com/econbenes ) :

    • Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.

    • Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.

    • The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.

    • By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.

    Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system [KR] ( snipurl.com/kotcomparetaxrates ).

    Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively [JK] ( snipurl.com/kotftmacromicro ).

    Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax [THBPN] ( snipurl.com/lessregress ).

    Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20 [THPDB] ( snipurl.com/moregiving ).

    On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base [TBJ] ( snipurl.com/staterates ).

    The FairTax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent [WM] ( snipurl.com/homebenes ).

    ALERT: Kotlikoff refutes Bruce Bartlett’s shabby critiques of the FairTax ( snipr.com/bbrebuke ).

  5. taxeye says:

    Thanks — but I dont think you grasped my point. The Fairtax couldnt possibly work. Its like shooting yourself in the jaw, when you need a cavity filled. Yes, we have a painful cavity with this idiot tax code.

    But the Flat tax CAN NOT work. If it would work – – GREAT – but thats my piont. It can not work.

    The fairtax — if passed — would be rescinded in 3 months — so you can forget about this 10 year projections.

    Why will it be rescinded? Because millions of people will HATE IT. Not just dislike it, they will scream bloody murder. This isnt an opinion, this is what would happen.

    What do you think nursing home patients, getting a tax of 2,000 a MONT would do”? What do you think a cancer patient, getting a tax bill of 40,000 dollars on their surgery and chemo, would do?

    What would renters do when suddenly they pay 2 billion a month in taxes?

    They will — like many others who get clobbered by this tax — scream like bloody murder. And they should.

    Oh, I know the theory — all those taxes will go DOWN. Nonsense, not by nearly that much. My family owns a business, we ran the numbers, and its absurd to say the business could POSSIBLY cut our prices 22% cause we saved the employee half of FICA. That part of the the theory is totally overblown.

    And Boortz say “the government itself will become a major taxpayer” (Page 148) Thats hogwash, frankly, balderdash, absurd. Thats like me, paying myself 1000 dollars to cut my grass. I can write the check, deposit the check, but I didnt come out 1000 dollars ahead. Fair tax actually thinks they can have the federal government pay itself 400billion dollars. They can write the checks, but they wont be 400 billion dollars a head.

    Fair tax would have to give many exemptions — nursing home and medical care generally, will HAVE to get exemptions. So will the military. So will renters.

    Then — with all those exemptions — the rate would have to be 50-60%, and others weill demand exemptions.

    Thats what would happen if this were passed. So it wouldnt possibly work. And they wont pass it. Congress does stupid things — but pissing off the elderly and the sick, isnt one of them.

  6. fortyfour says:

    So, we should just do nothing?

    Flat Tax? No Tax?

    Help me with the math . . . I no longer have an income tax. For me, that means about 15% of my gross pay never leaves me. I think that’s a pretty good car note. That includes my income tax, my FICA, etc. As the business owner, you do not match that anymore. Your cost of having employees goes down. True, your raw material cost goes up because you are paying a sales tax. But at the same time, your suppliers cost has gone down.

    Now, we’re talking about a consumption tax. You buy new, you pay tax. You buy used, no tax. A year ago, I bought a 2004 Suburban for about $23K. I paid about 8.5c/$. Another $2000 in my pocket.

    Oh Yeah, the feds send me a PreBate to bring me even.

    I’d like to know, have you read the book or are you going by what someone has told you? I coach my coworkers to identify problems and to identify POSSIBLE solutions to go with them.

    You’ve identified some potential problems. But, you’d have to be a moron to think that what we’ve got now works to our advantage. So, you don’t like FairTax, so what’s your solution?

    Give me a solution.

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