Huckabee Climbs On the Fair Tax Train Again
Citizens for Tax Justice has a piece today on GOP candidate Mike Huckabee’s “Fair tax”:
For years, Huckabee has been one of the main proponents of the “Fair Tax plan’, which would replace all federal taxes with a national sales tax. Citizens for Tax Justice and the congressional Joint Committee on Taxation have each found that to raise the same amount of revenue as current law, the sales tax rate would have to be about 50 percent.
A study by the Institute on Taxation and Economic Policy (ITEP) found that under the “Fair Tax,” the top 1 percent of taxpayers would receive an average annual tax cut of $225,000. Meanwhile, the plan would increase taxes by about $3,200 on average on the bottom 80 percent of taxpayers. In other words, Huckabee’s tax plan would significantly increase taxes on the overwhelming majority of Americans to pay for huge tax cuts for the very wealthiest Americans.
A Fair Tax For Those Poor Corporate Tax Cheats
The idea of a national sales tax is ludicrous at best. States would pile on with their own sales taxes in lieu of state taxes, something GOP Governors are already doing. Sales taxes will always take a larger share of earnings from lower income individuals. In an interview with the Daily Beast, Huckabee claimed:
“A tax is punishment. Why punish a company for making money? If there were no taxes on what we earn, imagine the trillions of capital that would flow here from around the world.”
Now nobody likes taxes, but most thinking people understand why we need them. Our existence as a country has to be funded somehow. When Conservatives start talking about a “fair tax”,remember whose corner they’re in. Trust me, it’s not the little guy’s. When politicians start claiming business taxes are unfair, it should bring laughter, not pity. Some of the biggest tax cheats in this country are our larger corporations.
I’ve written several articles for All Things Democrat about the un-American off-shoring of corporate profits, with many paying no taxes at all. Huckabee’s description of taxes as punishment against businesses means one of two things: He is either too ignorant or too dishonest to be President. This is a guy who hawks cinnamon as a cure for diabetes, so that tells you what you need to know. The Daily Beast writes:
In Huckabee’s view, tax reform should not harm the middle class or undermine the family.
Yet, that is precisely what the “Fair Tax” does. In 2007, Fact Check took Huckabee and others to task for their promotion of the Fair Tax plan:
We found that while there are several good economic arguments for the FairTax, unless you earn more than $200,000 per year, fairness is not one of them.
Way back in 1998, the Brookings Institute published a research paper which explains that the alleged fairness of the “fair tax plan” is subject to its’ implementation. Regardless of form, it will still be the wealthiest that benefit:
Advocates praise the simplicity, the potential for economic growth, the enforceability, and the fairness of a tax system based on consumption. But when examined closely, the simplicity breaks down, payments would be close to impossible to collect, and the tax’s fairness would be, at best, questionable.
If households are classified by annual income, the sales tax is sharply regressive. Under the AFT proposal, taxes would rise for households in the bottom 90 percent of the income distribution, while households in the top 1 percent would receive an average tax cut of over $75,000. If households are classified by consumption level, a somewhat different pattern emerges. Households in the bottom two-thirds of the distribution would pay less than currently, households in the top third would pay more. Still, households at the very top would pay much less, again receiving a tax cut of about $75,000.
Republicans Screwing Their Own as Usual
The problem I have with this tax plan is simple: The only costs that matter here are those of necessities. It’s apples and oranges when one considers the purchasing of staples as opposed to that second home, or a yacht. The question becomes that of subsistence vs. a thriving society.
Those who will come out on the short end of this deal will largely be Republicans’ own constituents. The people who already bear the most hardship from their party’s policies.