Huckabee campaigning for 23% sales tax

[kskiska]

Source: LAT

Political suicide? Quite the opposite for the GOP White House hopeful -- so far. But many call the plan for a national levy 'crackpot' (even if it would shut down the IRS).

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.

Read more: http://www.latimes.com/la-na-salestax24dec24,0,5286232.story?coll=la-home-center

[The Velveteen Ocelot]

1. Well, that should finish off the economy quite nicely.

With a 23% sales tax ain't nobody buyin' nothin.'

[flycessnas]

3. The Whole Idea...

...of a national sales tax is to curb consumption in favor of saving and investment.

We have to fix our trade deficit. We have to do something about our dollar.

We have to stop importing everything under the sun. It must stop.

We have to fix these problems before the boomer retirement thing kicks in full bore. We can't just raise the marginal rate. Rich people will simply move their operations elsewhere. That'll really kill the economy.

[POAS]

5. So you favor regressive taxation

over progressive taxation.

[papau]

30. Even the number "23" is a lie - $23 on a $77 purchase - 30% - and doesn't get enough to cover FIT

[ladywnch]

34. not to mention that this doesn't take into account state and local sales taxes

either. Taking those into account will push sales taxes closer to 40+% in some areas. Yet another false choice offering from repugs

[papau]

61. Put a home and car and food and rent exclusion and the Fed rate is 60% by itself still w/deficit we

now have and no longer covering Social Security.

[IronLionZion]

118. Why aren't rich people supporting it?

That's the million dollar question. Bush, Cheney, corporate America, etc. are all very much against it.

[NashVegas]

129. Because Poor People Won't Be Able to Afford to Buy Anything

That's not food or clothing.

Someone's got to buy those cheap Chinese toys.

[LynneSin]

151. That'll go over well in states that have no sales tax

I live in Delaware - don't fuck with our state's 'no sales tax' please!

[CTyankee]

199. I didn't know that. How does Delaware raise revenues?

Sales taxes are horribly regressive, but I have always assumed we have to have some sales tax to provide revenue to the state. In CT our sales tax is comparatively low, at 6%, with an exlusion on clothing under $75 and none on food (except in restaurants). CT has no county form of government which necessitates a higher number of state employees to fill in the gaps.

[harun]

214. Lots of ways, one of the biggest is that almost every corporation

incorporates there. So they get money in fees from that.

[CTyankee]

219. But these corporations must get something in return for incorporating in Delaware.

Usually it is in the form of tax breaks, so doesn't that cancel out any gain in revenue for the state? I don't know the whole story there, of course. Just wondering...

[DangerDave921]

204. It is progressive

In the sense that the rich spend more than the poor, and buy more expensive things. So a national sales tax would hit the rich more than the poor.

Personally, I am intrigued by the fair tax.

Would you at least agree that the current tax code is a behemoth that has gotten out of control?

[TheFarseer]

215. here's how it's regressive

Let's say you make $40,000 and Lee Raymond makes $400,000,000. Let's say you spend $30,000/yr and save the rest. Let's say Lee spends $40,000,000/yr and saves the rest. You pay $9,000 in Fair Taxes (not much left to save, is there?) and Lee pays $12,000,000. You pay 22.5% in taxes. Lee Raymond pays 3%. You get to save basically nothing and Lee is stockpiling hundreds of millions of dollars that never get taxed. Would it even be possible to make the rich richer and poor poorer any faster?

I will agree that the tax code needs work. People can have "their own business" and get out of paying taxes with all sorts of weird ass schemes. You can write off pretty much anything if you have a schedule C and you have no morals.

[The Velveteen Ocelot]

6. And people who are poor as dirt already will be hurt the worst.

This tax is extremely regressive. With a 23% tax on everything you buy, who's going to be able to save or invest anything? It's voodoo economics of the worst kind.

[flycessnas]

15. If It's So Voodoo...

...why do all the Texas Democrats support it? Why do they have it in eastern Europe?

This is what mean when I talk about the huge chasm between southerners and the rest of the country.

Those states down there are the future of the nation. Everyone here needs to understand that. Because of the Electoral College, those people will choose your leaders. They will formulate policy. They'll tell you what to do and you'll do it. Either that, or you'll leave the country.

Did you notice how quickly Kucinich's campaign faded? Without southern support, there was no campaign.

There might be a chance with Edwards but he'd have to carry Florida in the general.

[Tempest]

27. All Texas Democrats support it?

It sounds so preposterous I'm going to have to see proof of that.

[Lasher]

120. Didn't think so. n/t

[Tempest]

154. *crickets*

Can't blame him for turning tail and running though after the ass whooping he received on this thread.

[Lasher]

185. I beg your pardon

Ass whooping is always more properly expressed as "ass whupin'". If you don't mind, please comply.

And I'd appreciate it if you would wait breathlessly with me for evidence that the world is flat.

[Lasher]

196. Oops, looks like our buddy got tombstoned.

No big surprise there.

:D

[KatyaR]

31. Remember what Molly Ivins called Texas:

the "National Laboratory for Bad Government."

I wouldn't use what Texas Democrats believe as a standard for anything. Their government's worse than Oklahoma's, and that's saying a lot.

[existentialist]

72. hmmm, I remember her calling it

"Mississippi with good roads."

[POAS]

35. Can you prove-----

"why do all the Texas Democrats support it? " this?

Talk about an over generalization.

You want to know why they have it in "Eastern" Europe? You want to know why former Communist states have sales instead of income taxes?

Tell me which "Eastern" European states have this, maybe that will answer the question for you!

[Beetwasher]

38. Possibly One Of The Dumbest Things I've Ever Seen On DU

"Those states down there are the future of the nation. Everyone here needs to understand that. Because of the Electoral College, those people will choose your leaders. They will formulate policy. They'll tell you what to do and you'll do it. Either that, or you'll leave the country."

You wish! :rofl:

They are being left in the dust. The next Democratic President will be elected without the South. Inroads in the Midwest and S.W. and the FACT that a state like VA is now turning blue, will be the death of the Republican party. Southern states will be left out of the equation all together.

Holy crap are you clueless.

Your idiotic defense of a Federal sales tax is both pathetic and transparent and shows a complete and utter ingnorance of all things economic. Stop embarrassing yourself.

[Amerigo Vespucci]

48. The "leave the country" part was my favorite part, too.

Learn something new every day.

Do "those people down there" tell you to do or leave the country. WOW! Who KNEW?

:rofl:

[MisterP]

79. why, we should be grateful they even allow the other 35 states of us to vote! n/t

[Lorien]

80. Lol! Well said. I'm living in the South. Most people down here don't even

vote and can't name any primary candidates except Hillary and Rudy. The rest of the country isn't much more savvy, I'm sure, but there is a very pervasive apathy down here that I'm sure has something to do with the fact that the people know that they've been had. They voted repug in 2004 and all they got was a lousy recession, increased global warming and an endless and costly war.

[JeanGrey]

139. Now count ME incredulous. MOST people in the south

don't even vote? ROTFLMAO

[KamaAina]

224. In primaries, that's probably true

then again, it's also probably true of the North, East, West, and anyplace else I might have missed. :P

[DadOf2LittleAngels]

103. The south is being left in the dust?

Look the the awful deficits in cali? the bleeding electoral votes of NY and MA...

[Beetwasher]

110. Is That English?

:shrug:

"Look the the awful deficits in cali? the bleeding electoral votes of NY and MA..."

Err, there are awful deficits pretty much everywhere. In $ figures CA's (I assume you meant California) are more due to the fact that as a state, Cali has one of the largest economy's in the world.

And, uhh, what bleeding electoral votes? Did NY and Cali lose electoral votes lately? Not that I'm aware of. Does any state have MORE than either of them? WTF are you talking about?

You are of course aware that much of the south is being supported (welfare?) by federal taxes from the country's (and one of the world's)two largest economies, NY and CA.

[flycessnas]

111. No...

...but Bush was elected twice without carrying California or New York.

As I said, they're in charge. They have been for awhile and it's not going to change.

Five hundred people per day move to Arizona...that's from the Arizona Republic. A thousand people per day move to Florida...don't remember where that figure came from but someone here can look it up.

The South matters. Those people are going to be heard.

If you don't agree, that's fine. But it's not going to go your way. We both know that.

It's not even worth discussing.

[Beetwasher]

112. Uhh, Bush "Won" By Cheating

Bush didn't even win the popular vote in 2000 and relied on the SC to appoint him. Or have you convinced yourself otherwise?

"As I said, they're in charge. They have been for awhile and it's not going to change."

Who's "they"? I got news for you Chester, if you're talking about the dimbulb who calls himself Presidient, Chimpy is from CT. And Dicky is from WY. The people in charge are not from "Duh South".


"The South matters. Those people are going to be heard.

If you don't agree, that's fine. But it's not going to go your way. We both know that.

It's not even worth discussing."

:rofl:

Ohhh, Chester. You sound so desperate, like you're really trying to convince yourself of that! :rofl:

Good luck w/ that!

I guess you just argue by assertion? No facts, no examples, nothing but "I said so! Nyah!" :rofl:

Pathetic.

[flycessnas]

115. The Last...

...Democrat to be elected with a majority of the vote was Jimmy Carter. That was a long time ago.

Look it up if you think I'm wrong...but I know I'm not.

Bush and Cheney's power base was always in Dallas. Both of them lived there for many years. I know that because I lived there for eight years myself.

Your serve.

[Beetwasher]

122. LOL!

Umm, Chester, Gore won the popular vote. Look it up. And again, Chimpy only "won" because he cheated.

"Bush and Cheney's power base was always in Dallas. Both of them lived there for many years. I know that because I lived there for eight years myself."


Oh brother. :eyes:

What does that have to do w/ anything? Their "power base"? Umm your claiming the South matters in elections. Right? How so? Just because YOU say so?

[Name removed]

126. Deleted sub-thread

Sub-thread removed by moderator. Click here to review the message board rules.

[DuaneBidoux]

174. Actually, being from Texas I can tell you it is a red meat eating state.

But after being in Georgia and Alabama I can tell you it isn't "The South."

[JeanGrey]

140. You make the comment "didn't even win the popular vote"

and you expect to be taken seriously?

[Beetwasher]

156. Huh?

Bush DIDN'T win the popular vote. WTF are you talking about? :shrug:

Obviously it didn't matter as he was able to steal FLA. and have the Supreme Court appoint him. Or do you dispute that?

[kineneb]

135. CA gets back about $0.81 per $1.00 sent to Wash.DC

Our taxes help support the South. Wish we could get an even amount back, and we wouldn't have a deficit.

I think we are about the 7 or 8th largest economy in the world. We do not need the South for anything at all. (sorry DU folks from the South- we love you, just not your state governments)

[DuaneBidoux]

175. Texas is, I think, the only Red state that isn't on welfare from the blue states.

[default_to_freedom]

144. "The next Democratic President will be elected without the South."

I don't know about that. After all, Florida and Virginia are considered part of the South.

[Tempest]

152. Virginia is a blue state

They've been going blue since the 2002 elections.

They recently elected a Democrat to the House in a strong conservative district.

[default_to_freedom]

158. Ah, I see. As a result of turning blue, it has been geographically relocated.

Interesting concept. :shrug:

[Tempest]

176. If you want to get technical about it

Virginia was never really part of the south except for during the civil war.

Like Kentucky, it's considered a mid-Atlantic state.

[Beetwasher]

157. They Won't Be Necessary

All Gore needed was NH. Even W/out FLA and VA that would have put him over. VA and FL. would be gravy.

[default_to_freedom]

159. I'll take the gravy over a squeaker every time.

[Beetwasher]

160. Heh?

What's the difference? The point is they don't need the South to win. It would be nice, but it's not necessary anymore considering the inroads we're making in the West and Mid-West. All we need is every Gore state, plus NH, and these days that's a given.

[default_to_freedom]

161. Big difference. The larger the majority, the larger the mandate.

Not to mention the coat tails which would result in more House and Senate members.

[Beetwasher]

163. Nope

No difference. Hell, the idiot Chimp claimed a mandate w/ his "win" in '04.

W/ both houses of Congress and a Dem president, we'll have all the mandate we need.

My POINT stands. we DON'T NEED THE SOUTH TO WIN ELECTIONS ANYMORE. That's my point. Why are you changing the subject? Can't take the facts that the south is irrelevant? Too bad. Yup, sucks to be a Repub these days. :rofl:

Look, just add NH and DEMS win:

[Name removed]

165. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Beetwasher]

166. Umm, Einstein, Only YOU Are Talking About "Mandates"

I'm talking about winning. And we don't need the South to win. Period. Either dispute it and put up your facts or admit you're full of shit.

That being said, you STILL don't know what the fuck you're talking about. If we increase our margins in Congress THAT WOULD be a mandate for Democratic policies, especially if we get fillibuster proof majority in the Senate (which is looking possible!). Additionally, if we also pick up OH, VA, CO, NV and AZ, I think that would be enough of a mandate w/ hardly any southern states included. We don't need the South. Sucks for them since it's looking like a Democratically controlled government for the foreseeable future.

"Your disdain for the South demonstrates an attitude of divisiveness."

:rofl:

What disdain, I'm merely stating the facts. The Dems don't need the South to win. What's so disdainful about that? Why so defensive? Are you insecure or something?

[Name removed]

168. Deleted message

Message removed by moderator. Click here to review the message board rules.

[Beetwasher]

170. We Don't Need The South. Why Do You Want To Change The Subject?

Now all of a sudden we need a "decisive" win, according to YOU? Even so, we don't need the South to even have a decisive win. I just spelled out clearly that we can and probably will add a slew of new states in '08 w/out the South. Meanwhile, we will ALSO increase our Congressional margins without a doubt.

Seriously, WTF are you talking about? Who's "hoping" we only win by the slimmest of margins?

You need to learn how to comprehend what you read. In order to win we only need to add NH to the states Gore won, that doesn't mean that's what I'm hoping for or what I think will happen. It just happens to be truth. Now, that may suck for you, but who cares?

[ceile]

177. Exactly.

Don't stoop to his level. There are many people on this board that think the South is nothing but hicks and that we don't count. Best to just let it go and take the insults for what they are: just generalizations.
Welcome to DU!
Oh, and don't be offended by the "reading comprehension" jibe. That is standard response when they won't take the time to follow your argument.

[Beetwasher]

178. LOL! Umm, Where Have I "Generalized" About The South?

"There are many people on this board that think the South is nothing but hicks and that we don't count."

Did I say that? Where? Why do you feel the need to make shit up? Did I say you don't count? Where did I say that?

I pointed out the FACT that the Dems can and probably WILL win the Presidency w/out the South. How is that insulting? It's just the facts.

Now back up your bullshit or admit you're full of shit. Where did I generalize about the South?

It seems you need to comprehend what you read as well. You just make shit up. The other posters "argument" was irrelevant. I'm talking about how Dems can win elections w/out the South and he wants to change the subject to "mandates". That was never my point and understanding that means comprehending what you read.

[ceile]

179. .

:eyes:

[Beetwasher]

180. So, In Other Words, You Can't Back Up Your Bullshit

Figures.

[sarcasmo]

210. Almost makes you think it was a free republic troll.

[mbperrin]

41. I'm a lifetime Texas Dem, and I DO NOT support it!

I teach economics. Repubs run Texas at this time. Solution to rich folks leaving? 90% exit tax on all assets they take with them. Eastern Europe? Yeah, that's my dream, to live like the lucky ducks in any of the 'stans!

[flycessnas]

68. But...

...Democrats ran Texas for years and you didn't have a state income tax then, either.

[mbperrin]

75. No, we didn't. What he had and still have are lousy schools,

wispy social services, two well funded universities, state retirement systems on the lip of disaster, and a lottery that sells itself to pie in the sky dreams. Now we don't even have good roads, since the dedicated gas tax has been put into general revenues, and we have borrowed money for the first time since 1845 to build more.

I NEVER said that the Dems that ran the state back then were my sort, did I? Nope. So why stay in Texas, you may ask? To paraphrase the elephant dung sweeper at the end of the parade, "What, and leave SHOW business?" I'm 56 and can hardly wait to see what happens next. How low can they go here?

BTW, local sales tax here with al additives are 8-3/4%, and I pay nearly 10% of the price of my home in property taxes each year. And since we don't have a state income tax, I cannot deduct that from my federal taxes either. And property taxes aren't deductible from that, either. I pay property taxes to the city, county, school district, hospital district, junior college district, and for those in the county, to the water district as well.

So why do so many Texans oppose an income tax here? No legislator will ever agree to phase out or reduce any other tax in return. It would just be more.

Just like this huge national tax they're proposing. Just about everyone would pay far more under the proposal, since most people consume (and must consume) most of their income to stay alive. The mega rich are the exception, and the evil ones support this idea. Run this by Warren Buffett or Gates or better yet, look up their views on current taxation. They understand that when everyone plants the cherries, picks the cherries, and puts the cherries in the bowl, and only a few can take cherries out, soon you have neither cherries, nor bowl, nor exclusive cherry-eaters.

See the French Revolution for more details.....

[XemaSab]

189. As someone else on DU put it:

"We're replacing the economic system that DEFEATED communism with the economic system that SPAWNED it."

[XemaSab]

188. (Geography lesson:

the 'stans are not in Eastern Europe.)

Now back to your regularly scheduled flamewar. :)

[mbperrin]

203. Told you I teach economics!

Thanks, and just for the record, I don't wanna live in Belarus, Estonia, Latvia, Lithuania, or Ukraine, either! Now back to ranting!

[XemaSab]

206. Me either!

:D

[Amerigo Vespucci]

46. All of the Texas Democrats? Each and every one of them? Let's see a link proving that.

Why A National Sales Tax is Bad Business

Wednesday, May 4, 2005

by Bruce Bartlett

According to columnist Robert Novak, House Majority Leader Tom DeLay (R-TX) is adamant about replacing the entire federal tax system—payroll and income taxes—with a 30 percent national retail sales tax (NRST) collected by the states, such as that in H.R. 25, sponsored by Rep. John Linder (R-GA). I have written many times before about what a dopy idea I think this is. Following is an effort to summarize the key arguments against it that appear over and over again in the scholarly literature.

1. People will still have to keep records, file income tax returns and get audited because the states and some cities will continue to have income taxes. There is no reason whatsoever to think that the states will get rid of their income taxes if the federal income tax is abolished. Quite the contrary, they are likely to view the federal government as co-opting their traditional tax base—the general sales tax. Therefore, the states will just take over the tax base being given up by the federal government—the income tax—and abolish their state sales taxes, which would otherwise come on top of the NRST.

The only way this can be prevented is if the federal government prohibits the states from imposing income taxes at the same it abolishes the federal income tax, which is probably impossible constitutionally. And if the states keep their sales taxes, the federal government will have to force them to conform to its tax base. Right now, no two states have exactly the same sales tax systems and none come anywhere close to taxing sales as broadly as contemplated by the NRST.

2. There is a very severe problem of taxing business inputs under a sales tax. These must be exempt from tax in order to avoid cascading—taxes being levied on taxes—which creates serious economic distortions. To avoid this under a NRST, every business, no matter how small, would need some sort of exemption certificate, which would create unlimited opportunities for evasion, or they will have to be extensively audited in ways at least as onerous as under the income tax.

3. Services are by their nature much more difficult to tax than goods. For this reason, no state makes any effort to tax more than a few of them. Yet the NRST would tax 100 percent of services, including medical services and government services. Every time you go to the hospital you will have to pay 30 percent on top to the federal government. And local governments will also be taxed by the federal government on services they provide, which will sharply raise property taxes.

4. In order to offset the regressivity of the NRST, it would establish a massive new government entitlement program costing hundreds of billions of dollars that would send rebate checks to every American on a monthly basis. This system would be based on the poverty level income established by the Census Bureau. People would get 23 percent of this amount annually in 12 monthly installments based on their family status. Quite apart from the massive complexity of this proposal, it would clearly require an enormous enforcement mechanism to avoid fraud and would undoubtedly be manipulated by politicians. It would be very tempting to change the formula to aid the poor and penalize the rich, just as the current tax code does.

5. Every serious analysis has concluded that a NRST would have massive evasion. Taxing the spending of drug dealers and others not currently paying income taxes will not come close to compensating for the new evasion opportunities that will be created. Since it is not in the interest of either retailers or consumers to pay the tax, and because all of the revenue is collected at the point of final sale, it will be too easy for tax-free deals to be made with producers and wholesalers.

Although evasion of state sales taxes is relatively small, that is only because the rates are low enough that it is not worth the trouble. However, where rates are high on things like tobacco, evasion is also high. A vast amount of foreign experience indicates that retail sales taxes cannot be collected much above 10 percent without breaking down.

Under our current tax system there is withholding of taxes on wages, which is the vast bulk of the tax base. Under a value-added tax (VAT), something similar occurs because taxes are paid at each point of the production-distribution system. Thus, if the retailer fails to collect the tax, only a small portion of the total revenue is lost, whereas with a NRST all of it would be lost. Primarily for this reason, every single country that has ever contemplated something like a NRST has instead chosen a VAT, which the NRST people oppose.

Bruce Bartlett is a senior fellow with the National Center for Policy Analysis.

http://www.ncpa.org/edo/bb/2005/20050504bb.htm

[Ilsa]

53. I know plenty of Texas Democrats that are living on retirement

that can't afford it. They'll never be able to afford another car or appliance. They aren't paying much in taxes now since they are living on SSI and pensions. So they won't see the "Boost" in income from having FICA and FIT removed from their paychecks.

I am in Texas, and I abhor this tax.

[Justitia]

83. Whatta bunch of bullshit. I'm a lifetime TX Dem, like hell we support this GOP thievery.

Please show me in the TX Dem State platform where "all the Texas Democrats" support it - oh brother.

[Selatius]

97. Countries like Poland and Russia have FLAT INCOME TAXES, NOT SALES TAXES.

You are confusing a flat income tax with the FairTax sales tax proposal. Apples and oranges.

[DuaneBidoux]

173. I'm a Texas Dem and I don't think it is a good idea at all.

Toyota moved a plant into Alabama for low taxes and found the workers so poorly educated they almost had to move back out. It turned out they had to start a whole bunch of remedial after work schools to keep going.

Texas has a very regressive tax now (no income tax but high sales tax) and it turns out that studies show it is extremely hard on the poor.

If there could be someway to reverse the regressive nature (for example a tax credit for certain income and down) than I might consider that it is not a bad idea, but the regressive nature of the plan would trash our economy virtually overnight.

[lakeguy]

223. they also have income tax. nt

[acmavm]

7. Just think of all it could do. If you already couldn't afford food, this would

really put it out of the ballpark. You could save all that money that you'd otherwise spend feeding your family.

[sentelle]

184. is it time for Plumpy'nut?

Maybe we need to start thinking about the hungry in the US the way we are used to thinking about it in the 'underdeveloped' world?

[Beelzebud]

10. The whole idea is stupid. Period.

[DBoon]

43. and this can be done with tariffs

which have the advantage of not taxing domestically-made goods

[Amerigo Vespucci]

49. Excellent idea! Prevent working people from affording food, heat, shelter, clothing...

...that will teach those rich people a lesson and prevent them from simply moving their operations elsewhere. I'm sold!

[bemildred]

50. A recipe for depression and social revolution, is what that is.

I say "Bring it on!"

[JoFerret]

71. It's a very sick idea.

Quite dreadful. May it soon die.

[Acadia Blue]

76. Repeal the give away to the upper 2%. simple enough, and increase

taxes on them. The rich have had a windfall under their lap dog bush.

[sendero]

82. Just one tiny little..

... problem with that picture. Our economy is driven by the consumer and he's already hurting. Capital formation as a reason for savings is bunk, the rich already have more cash than they know what to do with.

This is a very regressive tax. Want more savings? Stop loading the middle class with the greatest tax burden.

[Lasher]

96. Larry Kudlow, is that you?

So how's that trickle down theory workin' for ya?

How did all that saving and investment from the 2001 & 2003 tax cuts help out? I must have missed that. And you think more of the same, tax breaks for rich people at the expense of others, is our ticket to economic salvation?

[CTLawGuy]

153. you need money to save first

and less consumption means fewer sales and fewer jobs, which means even less money to buy even fewer things, which leads to fewer sales and fewer jobs. Do you see the toilet bowl effect?

[XemaSab]

187. The people who need to save the most as a percent of their income

are the middle and lower classes.

The middle and lower classes are already spending more money as a percent of income than people in the upper classes.

FWIW, I already pay 23% of my income on taxes, and I'm not rich by a longshot. This sales tax would represent a tax increase for me.

Also, with teh internets, it would be easier to buy stuff from Canada, Mexico, the UK, or elsewhere, and have it shipped than pay the tax here.

This idea's a bad one.

[TheFarseer]

213. You have diagnosed the problem correctly

but I can't favor a regressive tax to fix it even if I thought it would be effective. I think we should make the first $500 of investment income tax free to encourage small savers. Then I think we need to tighten up our tax laws to catch tax cheats and stop off-shoring income. Then we need to tighten up our trade agreements to stop the race to the bottom in wages. The idea that taxes are driving corporations overseas is absolute nonsense. Corporate tax rates have never been lower. Corporations move out of the USA for lower wages, to get around pollution laws, OSHA etc etc. Taxes have very little to do with it. Ford hasn't turned a profit in how long and therefore they don't pay income taxes, but you still see them moving everything they can to Mexico. I know I'm lacking details, but you see where I'm going.

[DadOf2LittleAngels]

101. Really?

even if youre check was x% bigger?

[pokercat999]

102. The idea is that you will save enough from todays taxes

that you will actually "save" money. There is a lot on the web about the "fair tax" it's supported by Neal Boortz (he co-authored a book about it I think) and that should be enough to make any progressive's blood run cold.

[TheFarseer]

216. the idea that it will magically grow the economy

is as stupid as whole idea that lower taxes will grow the economy and cause higher revenues. Why don't we just do away with taxes completely and Washington will be buried under a mountain of money. There is no proof that this will grow the economy or result in higher wages for workers.

In Bortz's book he states that in the first year of the fair tax, corporate spending on capital equipment will increase 70%. Now how in the hell does he know that? At best it's wild ass guessing and at worst, it's counter intuitive. I think companies will continue to buy equipment when it's needed but by their logic spending should actually go down because it can no longer be written off their taxes. This entire thing a ridiculous sham.

[IronLionZion]

117. You think the world's biggest consumers will just stop?

The idea of consumption-crazy Americans not buying anything is the funniest thing ever.

[CTLawGuy]

164. until they run out of money

they will buy less that's for sure. and the money they save from taxes won't near make up for it.

[dogfacedboy]

198. can you say black market/increased hijacking of goods?

Something like this would increase crime drastically. Believe me.
Especially poorer neighborhoods. Hot goods, at low prices, with no 23% tax, will be very tempting to even the most honest when money is scarce. Where will those goods come from? Hijacked trucks, as well as warehouse, railroad, and air freight robberies, that's where.

[rdm]

231. Sounds like an awfully HIGH Percentage!! But I pay about that much

in TOTAL taxes. Between Fed, State, FICA, Property Tax, and Sales Tax - especially Hidden sales taxes like Gasoline & electricity. It is also a "consumption tax" which means that those who spend more, pay more. Therefore, those who buy more expensive cars - ie. inefficient sports cars or SUVs - will pay a higher dollar amount than those who by smaller vehicles. A national sales tax may be something to look at, but 23% seems a little high & it will hurt him in his Presidential Bid.

[demnan]

2. This is great news.

He doesn't stand a chance in hell if this gets out.

[TrogL]

60. Pity - we want him to be the nominee

[Acadia Blue]

78. He will not win. Mittie, the fascist, Rudy the corrupt fascist would

be far worse that this guy. I think Rudy and Mittie would end democracy and have corporatism all the way.

[POAS]

4. Even a homeless person selling

pencils on a street corner would have to pay this tax. Hell, he'd probably be forced to collect it from his customers also!

[flycessnas]

9. This...

...is what Texas does. Everything under the sun has a sales tax on it and then no state income tax.

I understand it's very popular in eastern Europe, also.

[gateley]

13. Same with Washington State. There's no tax on some food -- the 'convenience'

foods are taxed, but, if I recall correctly, the basics aren't.

[lumberjack_jeff]

63. That's true, but despite that Washingtonians have the most regressive tax in the US

[CTyankee]

200. Hi gately! No food tax in CT either, except in restaurants.

I remember my mother, a native Texan (as I am), absolutely having a fit over a food tax on groceries. She was outraged and said "A tax on food! Food that you eat!" which made laugh but she meant groceries as opposed to say, cleansing products and such.

[Oak2004]

225. What's charming about taxing the "convenience" foods

is that if you're elderly or disabled and you can't manage to cook for yourself, such foods aren't a "convenience", they're a necessity. They're also no "convenience when you're homeless and have nowhere to cook.

Taxes on "convenience" foods are not luxury taxes (which is how they're usually portrayed): they're taxing food eaten by the most vulnerable among us.

-- posted by a wheelie who shared a "luxury" (10% tax in Vermont) pizza with her currently bedridden wheelie/DD friend yesterday, seeing as neither of us have had anything close to the aide coverage we'd normally get (and need) over the past couple of weeks, and so no one has cooked for us.

[THUNDER HANDS]

21. and Texas is the perfect model for how the rest of the country should be run

[alarimer]

26. Yes and that's why Texas has so many poor people

And it is such a low-service state. It's not just sales taxes; property taxes are very high. Texas sucks for many reasons but this is one of the biggest. We NEED an income tax because they system we have is completely unfair.

[tammywammy]

62. Sales Tax in Texas

I pay 8.15% sales tax on everything except food. But I also pay a ton in property taxes. That's how Texas makes up the difference with not having a state income tax.

[DadOf2LittleAngels]

104. Bravo Sierra on the collection of Taxes

Homeless people who are vending on the streets are probably not collecting state income taxes why would they collect federal?

ON the paying of taxes, probably but they would likely be able to sell their wares for 20-25% more..

[POAS]

131. You miss my point

They'd have to pay the tax when they buy anything with the few pennies they make off selling the pencils.

Of course they wouldn't collect the tax, it's called exaggerating to make a point.

[TheFarseer]

218. and if he doesn't collect it?

I suppose he is a criminal and so are you for not paying the tax? Unless of course, they are used pencils, but who is going to buy used pencils from a homeless man :P

[boricua79]

8. how is it "fair" to expect someone

making 30,000 to pay a 24% percent tax on, let's say, a television, and a person making 30,000,000 dollars to pay the very same 24% percent tax on that television.

The total cost of that television will be A MUCH HIGHER percentage of expended income on the middle-income person then it would be on the rich. It's a drop in the bucket for the rich person, but it's a major additional headache on the middle-income person.

How is it fair...if only to say, "well, at least everyone is paying the exact same amount on the TV and contributing the same "fair" amount to the national treasury per item purchased".

Yeah...but what is not looked at is the extra strain on working people. It strikes me as being like the old laws of France, which would dictate that nobody could sleep under bridges, and that it was fair because the law applied to all. In practice, the poor were screwed by that law, while the rich would never find themselves in the position of needing to be under a bridge.

How is Huckabee possibly an attractive candidate to anyone with some economic sense? What person below 100,000 a year income is actually interested in supporting this?

[RantinRavin]

16. Highly doubtful they would both be buying the same TV

The person making 30,000 a year would most likely but a $600 Tv, while the person making 30 million would be buying a $6000 TV....

[laconicsax]

45. Oh yes

Let's say that both people live in Western Washington...maybe Redmond, with it's 8.9% sales tax.
Let's also say for the sake of argument that both people are paid bi-weekly with 25 pay periods per year, pay payroll taxes on their earnings, and there are no other taxes in existence.

$30,000/year would be $1108.20 per pay period (25 pay periods per year, 6.2% social security tax and 1.45% medicare).

A $600 TV plus 23% national sales tax and 8.9% local would add $191.40 (31.9%) to the price of the TV, bringing our total to $791.40, or about 71.4% of their paycheck

$30,000,000/year will be $1,176,555 for the first pay period and $1,182,600 for the rest of the year (assuming the same 25 pay periods, but social security tax only on the first $97,500 and medicare tax on all of it).

A $6000 TV plus the same 31.9% in taxes will end up costing $7914, or about 0.67% of their paycheck.

That seems perfectly fair and progressive to me.

In order for the two to be taxed comparably, the person making $30 million per year would need to buy a $600,000 TV.

[sandnsea]

55. Thank you for doing that math

You wouldn't think it would be necessary. I don't know why people can't figure it out for themselves.

[laconicsax]

57. It happens when people think with their gut

instead of their brain.

[depakid]

59. Yep- the fundamental principle underlying modern economics

The Law of Diminishing Marginal Utility.....

[DadOf2LittleAngels]

105. Unless you want a rich person to pay 10,000%

sales tax on a tv such a comparision under any system is asinine..

Lets look at it this way.. A righ person probabally pays for things the middle class guys dont buy..

Boats, vacations, other luxury items..

[GoddessOfGuinness]

190. Obviously, people who only make $30,000 a year should not own a TV...

It would be "living beyond their means". :sarcasm:

[BreweryYardRat]

230. That's what some of the worst, most ass-backwards Republicans believe.

My mother has actually said that -- and meant it.

Which means that the meme's gotta be getting pushed somehow.

[NickB79]

183. Delete

Someone beat me to the punch :)

[XemaSab]

191. The vice president of the company and I both drive Toyota sedans

He makes four times what I do.

Does he pay four times more for a car?

No, we pay the same amount.

When he goes to the store to buy eggs, does he pay a different price for eggs than I do, because he makes more?

No, we pay the same amount.

There's no special discount for the poor, and there's no special tax for the rich, as far as consumer goods go.

[lumberjack_jeff]

65. Everything about the "fair tax" is unfair.

First, 23% is a "tax inclusive rate" which is bullshit. The real tax rate (as advertised) is 30%+

A 30% tax rate, once you subtract the tax rebate for po' folk and the exemption for business purchases would have to be 50%+

Add in the new underground black market economy it would create, and plan on a tax rate of 90-100%.

I suspect a 100% one-year inflation rate might not be good thing. But I'm no economist.

It's the most moronic idea ever from a party of really moronic ideas.

[IronLionZion]

113. What about those rich income tax evaders?

who escape by earning mostly from investments and store it offshore and cook the books and whatever else? You are assuming that the $30 million person is paying his fair share now.

[XemaSab]

192. Earlier in the thread someone made the argument about luxury goods

Even a middle-class person can order something shipped from overseas.

Rich people, instead of going to the Santa Barbara BMW dealer, will go to the Vancouver BMW dealer, or the TJ BMW dealer.

This will be an easy tax for the wealthy to duck, if it's worth it to them. :shrug:

[DangerDave921]

205. but

1) you're assuming the two folks in your example would buy the same t.v. Rich people buy more expensive items. And they buy more items.

2) Income taxes would be gone so that expense would be gone.

3) The fair tax provides a prebate for the necessities of living.

4) You already pay a huge amount in taxed that are embedded into every product you buy. Without the company having to pay taxes, that would bring down the cost of goods.

I think the fair tax needs serious, bi-partisan examination.

[Demeter]

11. The Value Added Tax Scheme of Europe--Not a Good Idea

Imagine turning the entire corporate world into your national tax collectors--that's what this does.

When income is taxed, either the individual or his employer is the "tax collector", and the corporation also reports on itself. If corporations are doing all the collecting, then they have less incentive to defraud. The money doesn't come out of their pockets, but from the employee or the shareholder, you see.

When sales are taxed, the corporation has a huge incentive not to pay--the record keeping is horrendous, and cash sales are easily diverted and hidden.

[Thothmes]

23. This scheme is not really a VAT tax

The theory as I understand it to be that there is roughly 23% worth of Federal taxes already embedded in the manufacture, transportation and sale of all items manufactured in this country. In theory, all of these taxes would be eliminated up and down the production and distribution chain. In theory, the cost of manufacture, transportation, etc would be lowered by the amount of taxes removed. Thus the final sale price of an item before the "fair tax" is added would be 23 % lower because no federal taxes were collected on that item up to final sales. The only point that the Federal Govt would collect any tax on items would be at the point of final sales. The "fair tax" is only collected on new items. It would not apply to say a used car or a home that is being resold. Also a part of the original "fair tax" plan was that each month, every citizen in the country would receive a rebate check from the Feds for the average taxes paid on food and medicines. Don't see the plan working as it is theorized.

[Brrrp]

40. Used cars would cost more than new cars.

If used cars were untaxed. This would wreck the new car market.

[XemaSab]

193. That's silly though

Most homes sold in this country are not new.

In 2001, according to the census, the average age of an owner-occupied home in the US was 30 years.

http://www.census.gov/hhes/www/housing/ahs/ahsfaq.html

If you only taxed NEW homes, the developers would throw fits.

Come to think of it.... :evilgrin:

[David Zephyr]

209. VAT would be the final straw to the last of U.S. manufacturers who are holding on barely today.

Want to kill of the 10% of manufacturers who are left in the U.S.?

Adopt the Value Added Tax Scheme and we're done.

Of course, accountants love this because as you say it is a "records keeping" windfall for them and a nightmare to manufacturers.

Ugliest idea to ever, ever surface. Ever.

[jwirr]

12. 23% tax on food, medicine, fuel? God help us. What is this so called

preacher talking about!

[bahrbearian]

14. R.I.P. Hackabee

[DFW]

17. That should go over like a turd in the office punchbowl

Eliminate the income tax, of which little is paid by low income people and
those on welfare, and hike their subsistence costs by 23%. It's comforting
to know that Paris Hilton would pay an extra 23% for her next Mercedes, but
to the person that is barely able to pay the rent and keep the family fed,
it stinks. European countries have had Value Added Taxes for decades, in
addition to their income taxes, and they have been like heroin--they are
addicted to them, needing ever more to satiate their needs. They keep raising
the levels of their VAT and never seem to get enough out of their citizenry,
even though they tax them way more heavily than we do. In Germany, they recently
put the 19% VAT onto gas sold at the pump, whose price already contained over
80% in taxes, which means Germans now pay a 19% tax on the fuel tax!!!

VAT is a clever idea, but extremely unwieldy in practice, and grossly weighed
to disadvantage those with low or no incomes. Like heroin, the doasge keeps
getting raised and raised and raised just to maintain a level of addiction, and
the patient never gets cured. The lobbyists get into the act, getting politicians
to reduce or eliminate the VAT on their clients' products, and you can guess how
much of a lobby the lower income people have in any country.

I'd just eliminate all income taxes on people earning under $30,000, and have a simple
progressive tax above that. Hitting the people who can least afford it with a 23% tax
that they can't avoid anywhere seems like a move devoid of the Christian charity that
Huckabee so wants us to believe he has.

[pipoman]

18. I have read a little about "the fair tax"

and it does address (quite well I believe) all of those concerns already raised in this thread. No tax on food, the first $Idontremember of spending per family member is tax exempt to allow for the necessities of life (clothing, shelter, etc.). I don't know if John Lender and Niel Boortz's plan is the one but they have started an interesting conversation for sure. I am all for trying something new, I believe that the current system already is broken beyond repair. I pay at a higher rate than Warren Buffett, that isn't right. It is the rich who will be most against this because they use the current tax system to avoid paying taxes then spend the savings on an extravagant lifestyle. This isn't to mention all of those wealthy drug lords and others who earn a lot of money which they do not report then live like kings. I am disappointed to see Democrats automatically dismiss anything new in favor of status quo.

[alfredo]

20. The rich spend a much smaller percentage of their earning. Biff and Muffy

middle class will be socked big time.

[alfredo]

19. So 23% federal sales tax plus 7% state sales tax would put this SSI

recipient out on the streets.

[Amerigo Vespucci]

47. The 23% is a lie...

...many experts say that in oder to "abolish the IRS"...the carrot that's being dangled in front of voters too stupid to read the fine print...a federal sales tax of between 40 and 50 percent...quite possibly higher...would be needed. That's in addition to the state tax.

[alfredo]

56. That's even better. Like I said in an earlier post on Huck, we will be

able to paint him seven shades of crazy.

[salin]

89. I've read that it would take between 40%-60% to replace income tax revenues

Just imagine that everything being purchased just jumped up in price by 50%.

[bemildred]

22. What the heck, how about 50%, wouldn't that be even better?

:puke::puke:

[phrigndumass]

24. ... and what about property taxes? n/t

[Brrrp]

37. It would grow in that direction. Inevitably.

[Demeter]

25. Because Taxing Excess Wealth Would Be SO Useful!

And we can't have that! Can't get those sheckels out of the trust funds and into the economy, don't you know.

[phrigndumass]

29. speaking of trust funds

There would be no tax on capital gains or inheritance, only if or when it's spent. Money attracts more money, and that interest earned is what feeds the wealthy. Remove the income tax from it, and the rich get rich much quicker. They would go from "have more" to "have most" in nothing flat.

[Lasher]

98. The wealthy have the most already.

As of 2004 the top 5% controlled 58.9% of total US wealth.


http://www.faculty.fairfield.edu/faculty/hodgson/Courses/so11/stratification/income&wealth.htm

[phrigndumass]

108. wow on that chart!

So the top 40% own 96% of the nation's wealth, while the other 60% of us own the other 4%. Seems like 96% isn't enough for them!

Imagine if they didn't have to pay income taxes on interest earned from that wealth. Then imagine the compounded interest over a period of time, again without the expense of paying income taxes.

[Lasher]

119. Glad you approve.

Simple graphics like that are an effective form of communication, especially with those who don't have a lot of time on their hands to read long articles.

And this wealth disparity has surely increased during the last 3 years under Junior's policies. The massive 2001 & 2003 tax cuts mostly benefited this wealthy elite. Taxes on capital gains and dividends, which is where most of the upper crust gets their income, are not taxed at only 15%. Only 17% of households in the bottom 60% of the income spectrum own stock in taxable accounts. Before Junior came along these earnings were taxed the same as earned income.

http://www.cbpp.org/1-30-06tax2.htm

And then there's the Paris Hilton, or Estate, tax cuts. In 2001 $675,000 of inheritances were tax free (twice that if both parents are willing an estate to their heirs) and all above that was taxable at 55%. Over time since then the exemption has been increased and the maximum rate decreased. In 2009 the exemption will be $3.5/$7 million and the maximum rate will be 45% and the year after that all inherited wealth is tax free. In 2010 this reverts back to near-2001 levels, at $1/$2 million & 55%.

The current state of our economy clearly indicates that the trickle down theory was never anything more than an attempt to find moral justification in stealing from the poor to give to the rich. And still these supply-siders press on, never being satisfied that taxes on rich people and social services for everyone else have been reduced enough. The flat tax - or "fair" tax, for those who prefer Orwellian labels that have become vogue since the turn of the century - is just their next batch of snake oil in their endless pursuit of the new dark ages.

[phrigndumass]

148. Thanks Lasher

Thanks for your elaboration and the link to the article. Outrageous! is the only word going through my mind right now. I wish it were easier to convey to the average American just how insane with greed these folks are.

[Lasher]

162. I'm glad you've joined us, phrigndumass

All rich people aren't guilty of greed. Warren Buffet, for example is the second wealthiest person in the world and he's in favor of the rich paying their fair share in taxes. But yes, there are many who are truly disgusting. When this subject comes up I often think of the heirs of Sam Walton of Wal-mart fame currently ranked 12 thru 15 on Forbes' list of richest Americans.

http://www.forbes.com/lists/2007/54/richlist07_The-400-Richest-Americans_Rank.html

Hope you decide to stick around. Folks here at DU are always real friendly, as long as you agree with everything they believe.



So if people get snippy, try not to let your feelings get hurt.

Lasher

[Joe Bacon]

28. Yeah, like I need to pay an additional 23% for my insulin!

and an additional 23% for my lab tests and an additional 23% when I see the Dr. and an additional 23% for my rent.

HUCK SINN can take his 23% and stick it up his ass!

[Rockerdem]

32. Doomed to failure

Pressure to exempt this and that from the tax will push the rate higher. It will also make the thing nearly as complicated as the IRS over time.

I'm not in favor of the IRS by any means. Over the past decade or so, the instructions have become indecipherable, and I have to pay to have my forms filled out. So I can see some relief if it was the businesses who had to the that dirty work. However, the average joe is not going to skate with the (un)Fair Tax. Not with this present one-party system in DC bought and paid for by lobbyists.

[Lorien]

33. Yet another great way to screw the poor

the poor would suffer most under this plan, as basic necessities already eat up their budget and some make so little that they barely pay an income tax. Self employed people like me would be screwed, too; I still need to spend a lot of money to make money, so what would happen to all of those deductions? The rich would make out like bandits; if they want to make any major purchases then they'll just make a quick hop over to London, Paris, or even Canada.

[KillCapitalism]

58. That's the Republican way!

They sure love dreaming of new ways to fuck the poor don't they?

[customerserviceguy]

36. The so-called "fair tax"

is another half-baked scheme that is doomed to failure, anyway (there are too many corporate lobbyists who have an enormous stake in the present system), but the Freeptards really like the idea. Some of them are not too hot on Shucksabee right now, but if he gets the Rethug nomination, ideas like this one will turn them around, especially if Hillary is our nominee.

[ldf]

39. render unto caesar that which is caesar's, and render unto god

that which is god's.

tack on another 10% for tithing.

so 33%, total.

hucksterbee would want to cover all bases...

[daleo]

42. A 7% Goods and Sales tax killed Canada's Conservative Party

For about 14 years.

It's not really popular with voters. Canada's Conservatives brought this in on top of regular taxes (there was a big deficit), though. I would expect the same from U.S. Republicans if it ever happens (well, income taxes on the hyper rich might be cut).

[DBoon]

44. and what agency would collect this tax, if not the IRS?

If you can't get people to pay income taxes, why does Huck think they will pay a 23% sales tax?

If people hate the IRS over personal income taxes, what will happen when a 23% sales tax is levied? Does Huck think people irate over an income tax will be thrilled to pay a sales tax instead?

[Amerigo Vespucci]

52. That's one of the topics that "Fair Tax" cheerleaders don't like to discuss

The IRS is being painted as the boogeyman, the target, but all that would happen is that a new government agency would need to rise in its place because no matter what Mike Huchabee and John Linder and Neal Boortz and the rest of the assholes pimping this plan have said, a "National Sales Tax" (or "Fair Tax") would not, and COULD not, "administer itself."

[Amerigo Vespucci]

51. "Huckabee's sales-tax idea could be his Waterloo"

Huckabee's sales-tax idea could be his Waterloo

by Frank James

December 24, 2007

Being it's Christmas Eve and all, and many people are doing their last-minute shopping at retail malls across the nation, it seems an appropriate moment to talk about sales tax, specifically Mike Huckabee's embrace of a national sales tax and what it may mean for his quest for the Republican presidential nomination.

In short, it probably means trouble for him down the road.

Janet Hook of the Los Angeles Times has a piece today that's well worth reading on how his embrace of a 23 percent national sales tax, the so-called Fair Tax, to replace the income tax helped give Huckabee some momentum at a critical time in the process.

As Hook reports, The focused efforts of a single-issue group FairTax.org helped Huckabee come in second in the Iowa straw poll last August to Mitt Romney, which made many a political reporter and probably some Iowa Republicans take Huckabee, a former Arkansas governor, more seriously.

So it played in Waterloo, Iowa. But it could wind up being his Waterloo, period.

Why? As Hook also writes, most knowledgeable students of the nation's tax system and its fiscal policies don't take the idea of replacing the income tax with a national sales-tax very seriously.

Also, while many Americans may not understand the fiscal esoterica involved, when the experts' criticisms filter through, as they inevitably will, there likely won't be a big groundswell for so massive a change in the nation's tax philosophy. And for good reason.

Independent analyses have concluded that the tax would have to be far higher than 23% to maintain the government at current levels -- especially if Congress did not eliminate popular tax breaks, such as the mortgage-interest deduction.

William G. Gale, a tax expert at the centrist Brookings Institution think tank, estimates that the levy could run as high as 50% -- a tax so steep that it would be an invitation to mass tax evasion.

"It's a crackpot plan," said Bruce Bartlett, a conservative economist and former Treasury Department official who is a leading critic of the sales tax. "Anyone who supports it should not be taken seriously."

That kind of devastating criticism is balanced in Hook's story, as one would expect, by the arguments made by national-sales tax boosters.

Proponents of a national sales tax say it would be an improvement over the current system because it would increase the incentive to save, by taxing money spent instead of money earned.

Also, the proposal would rid the tax code of its myriad loopholes and would free taxpayers and businesses from the time-consuming, often costly task of preparing annual tax returns.

"What we would do with the fair tax is to eliminate all the taxes on productivity, which means you could earn anything you want," Huckabee said. "You wouldn't be penalized for saving, earning, for having a capital gain, making an investment."

Huckabee and Fairtax.org call for a 23% tax on virtually all purchases in place of federal income taxes, as well as payroll taxes to fund Social Security and Medicare.

To ease the effect on the poor, they propose a "prebate" -- a monthly cash payment to every family -- to cover sales taxes on spending up to the federal poverty level.

Here's the problem for Huckabee. A national sales tax won't work to fund the U.S. government at current levels.

There may be some who think the government is too big who would welcome starving it of resources and see a national sales tax as a step to that end.

But it's interesting to note that even Grover Norquist, the leader of Americans for Tax reform, who has stated goal of "strangling the government in the bathtub" opposes the national sales tax as even more confiscatory in his view than the present income-tax system. Hook mentions his opposition in her story.

The sales-tax folks rail against the loopholes in the current tax code. But their grievances are nothing compared to the caterwauling that would occur if all the loopholes in the present code were abolished.

Those loopholes were put in the tax code over many decades by thousands of lobbyists for industries, charities, unions, churches, you name it, whose successors would put on a fight like few witnessed in the nation's capital if their beloved tax deductions were threatened.

And we're not even talking about the din that would be raised by states, most of which see the sales tax as an important source of revenue and wouldn't take kindly to the federal government horning in on an area they've seen as theirs.

This 2005 paper lays out in great detail the challenges states would face under a national sales-tax regime.

The negative impact on states makes it curious, then, that Huckabee as a governor has embraced the national-sales tax idea.

It raises the obvious question as to whether his support for such a tax is in part an effort to neutralize the attacks on his record as Arkansas governor which includes tax increases he supported although, in fairness, he also cut some taxes as well.

Given the fringe nature of the national-sales idea, any candidate who has a national-sales tax at the center of his or her economic program is going to be seen by many voters as unrealistic, to put it politely.

With the Huckamania that currently exists, a lot of voters probably haven't focused on Huckabee's stated desire to deep six the current tax code and install a national-sales tax.

But when they do, it likely spells trouble for Huckabee, who hasn't really given himself a lot of wiggle-room on the issue. If he changes his mind under pressure, assuming he survives the early caucus and primary states, he'll be easily labeled a flip flopper.

In any event, there's no national sales-tax yet. So shop away on this last shopping day before Christmas.

http://www.swamppolitics.com/news/politics/blog/2007/12/by_frank_james_being_its.html

[Ilsa]

54. I bet the rich will get luxury items exempted from the tax, saying

it is too much to pay $230,000 on a $1,000,000 home or yacht. They did it before, back in 1989 or 1990.

[lumberjack_jeff]

66. Probably not, HOWEVER...

Business purchases would doubtless be exempted.

That yacht would be a business expense, and so would that condo in Honolulu. Tax free.

[TexasBushwhacker]

64. Hello black market!

On the plus side, it would tax consumers who are part of the underground economy - drug dealers, day laborers, etc. - anyone who works for cash and doesn't pay income taxes. It would also tax the rich as much as they are consumers, even those who are living off their wealth rather than income from wages. However, I wouldn't want to be in a business that depended on discretionary dollars - restaurants, retail anything, service based businesses (hair salons, etc.). Adding 23% to their bills would absolutely kill their businesses.

[lumberjack_jeff]

67. Those who are now part of an underground economy would be the foundation of a new, bigger one.

Drug dealers who now operate tax free will now switch to black market shoes, insulin, formula and diapers.

An improvement? Not for the rest of us.

[kineneb]

138. this would create a new underground economy, based on barter

if no money changes hands, then there would be no taxes collected. Or perhaps someone would come up with an alternate currency as some groups and towns have done.

...all sorts of new ideas for creative financing would come about...

[TexasBushwhacker]

155. Actually, after watching Money As Debt ...

a barter based economy and alternate currencies doesn't sound like such a bad idea.

http://video.google.com/videoplay?docid=-9050474362583451279

[leaninglib]

69. I'm not much on the Huckster; however, I would consider anything

that does away with the IRS and all of their damn forms.

Moreover, a tax on consumption is the most rational of all taxes. Take for example the gas tax.
The larger the vehicle, the greater the wear and tear on the highway system. In addition, the larger vehicle, the larger the gas tax. As a result, those who use the highway system the most, pay the most.

I cannot imagine a more fair or equitable tax system.

[XemaSab]

194. I know a lot of working class people who need trucks for work

Ranchers, gardeners, contractors, farmers...

I also know a lot of rich people who drive big SUV's as a status symbol.

Why should Cole the plumber, who makes 40,000 a year, pay as much in gas taxes as Dave the internet wizard, who makes 400,000 a year?

Especially when I suspect that it's really Brian the big rig driver, who also makes 40,000, who is causing most of the real wear and tear on the roads.

But Brian the big rig driver delivers food to Cole the plumber and Dave the internet wizard alike...

It's one of those things that seems like common sense, but might not be that transparent.

[AndyTiedye]

70. Quite Remarkable to See Almost Every Form of Reich Wingnut Lunacy Imaginable in One Candidate

:scared: And so scary to think he might actually become President

[Emillereid]

73. Would this tax be on food too????

[existentialist]

74. and here I remember, earlier today,

someone here on DU was saying that there was no way to beat Huckabee.


Relax folks, with lame brain ideas like this being seriously floated by candidates anything can happen.


Who knows, some of these lame brain ideas might just take off in the public mind and score for the candidate.

But I also remember, earlier in the week reading an article by a reporter who had been covering the Edwards campaign in Iowa.

The reporter stated that much of political reporting was waiting for a candidate to "step in a cowpie" so that the reporter would have something to report. The reporter was struck how how disciplined Edwards was, how he could speak off script, on matters of substance, and not "step in a cowpie."

This is not an endorsement of Edwards, but in fact I think that all three of the front running Democratic candidates are better at speaking, off script, and not stepping in cow pies, than any of the leading Republicans.


Personally, I'm optimistic, and I think that we can win with any of our major candidates.

[FreeStateDemocrat]

77. Plus state sales tax and municipal in some areas. Now you're talking about 30%.

[w4rma]

81. This would be a huge boon for for the smuggling "industry" and organized crime. (nt)

[Liberty Belle]

84. Huckabee Campaigning For 23% Sales Tax

Source: Los Angeles Times

HUCKABEE CAMPAIGNING FOR 23% SALES TAX

December 24 --

Political suicide? Quite the opposite for the GOP White House hopeful -- so far. But many call the plan for a national levy 'crackpot' (even if it would shut down the IRS).
Los Angeles Times -- 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.




Read more: http://www.latimes.com/la-na-salestax24dec24,0,5286232.story?coll=la-home-center

---

If you don't want to see a preacher as president, just tell your Republican and decline-to-state friends that Huckster Huckabee wants to charge them all 23% sales tax everytime they buy anything from groceries to a car...not to mention all those holiday gifts.

[onehandle]

85. Sounds like a Looneytarian. nt

[Donnachaidh]

86. *snicker*

:rofl: :rofl: :rofl: Oh THAT will go over like a lead balloon!

[whistle]

87. A regressive Federal Sales tax so the rich will never again have to pay income tax

[obiwan]

88. What happens to those of us who are on a fixed income?

My wife and I survive entirely on Social Security disability. We are making it (barely). A consumption tax will wipe us out. While the idea of a consumption tax is OK, this "Fair Tax" may help out the working class while destroying those who, through no fault of their own, can no longer be a part of the working class. Hopefully Huckabee doesn't stand a chance in the general election. If he does- God help us.

[Stump]

90. It's called the FairTax...

And here it is http://www.fairtax.org/site/PageServer

[PittPoliSci]

91. good, i hope it ruins his campaign.

after he gets the nomination, that is.

VAT's are the most regressive awful tax possible, i'm not surprised he supports it.

[silverojo]

92. Just another idea to tax the bejesus out of the poor

Rot in hell, F*ckabee! :grr:

[leaninglib]

99. Just another idea to scare the bejesus out of the poor sheeple;

for the poor sheeple pay no taxes.

Nevertheless, Huckabee ain't the man.

[Endangered Specie]

93. Getting rid of the IRS is a LOAD OF BULLSHIT!...

I can guarantee you that an organization that sends out 100,000,000 checks a month (fairtax proposes sending you a check to make up for your sales tax on essential items), makes sure those checks are accurate and keeps up with changes of address, increase in family size etc etc is gonna be a big fucking organization!
Then there is the matter of enforcing this tax at flea markets, on the internet, etc etc... that organization will probably be just as big as the old IRS, it will just have a different name, and if I had a say they should call it Ministry of Taxation, or "minitax" for short (apologies to Orwell, but 'fairtax' is a name that sounds like something he would cook up).

[and-justice-for-all]

95. August 4, 2004, J. Dennis Hastert, (R-Ill.)

"As reported in the Washington Post, August 4, 2004, J. Dennis Hastert, (R-Ill.) the Speaker of the U.S. House of Representatives published a book that suggests abolishing the Internal Revenue Service and replacing the current tax system with either a flat tax, a national sales tax or a value-added tax. Are Hastert's taxes meeting the criteria of Biblical taxes? Curiously, they are all taxes that would favor the wealthy and burden the poor."

[and-justice-for-all]

94. Religous Right Economics..

I think Huckabee is telling us something and giving us a taste of their real agenda.

"As reported in the Washington Post, August 4, 2004, J. Dennis Hastert, (R-Ill.) the Speaker of the U.S. House of Representatives published a book that suggests abolishing the Internal Revenue Service and replacing the current tax system with either a flat tax, a national sales tax or a value-added tax. Are Hastert's taxes meeting the criteria of Biblical taxes? Curiously, they are all taxes that would favor the wealthy and burden the poor."

1)Starve the Federal Government through Tax Cuts
2)Shift Education and Welfare to Churches
3)End Government Regulation
4)Increase Material Wealth, Plunder Natural Resources

http://www.theocracywatch.org/rr_economics.htm

[DadOf2LittleAngels]

100. I rather like the idea

Taxing consumption rather than production makes good sense and might help the environment.

Among the fair tax plans I have seen was one where every American household would get a check at the end of the year for the taxes they would pay up to the poverty level.. So yes a poor family of four would still pay a pretty bad tax rate (23%) but at the end of the year they would get 23% of about 20,000$ (4,600$) even if they made and/or spent less than that..

[baldguy]

106. And predatory lenders would get them to hand over that check immediately upon receipt..

There's nothing "fair" about a flat tax, or a national sales tax.

[DadOf2LittleAngels]

107. Right because even if they paid 0% taxes

Predatory lenders would not go after the poor right?

Thats call a Non Sequitur... It does not follow because predatory lender exist that a sales tax is bad nor that the poor would be any safer..

[baldguy]

109. I guess you haven't been paying attention lately, have you?

Predatory lenders go after the poor primarily. They don't make money off the loan payments, they make money off foreclosing on the loan & taking the collateral.

And thats just *one* reason why its a bad idea. Both a national sales tax and a flat income tax are inherently regressive taxes. By forcing the poor to pay a larger portion of their income to the govt, it puts them at an even greater economic disadvantage - and thereby making it all but impossible for them to work their way out of poverty.

[DadOf2LittleAngels]

116. I guess you still want to talk about oranges in an apple discussion

"Predatory lenders go after the poor primarily."

Duh really? SO I guess *not* having a flat sales tax is no panacea against predatory lending..

[baldguy]

124. Pay attention

http://moneycentral.msn.com/content/Taxes/Preparationtips/P41332.asp

[minavasht]

125. Did you see the part

were the "poor" will get a refund check? Even if they spent less on that sales tax?
Why do you keep saying that they will pay more in taxes?
Rich people have gazillion ways to avoid paying taxes under the current tax code, none of the illegals pay taxes under the current tax code, drug dealers don't pay taxes - do you want me to keep going?
All of them will have to pay the sales tax under the fair tax.
And you are against THAT?????????

[baldguy]

127. I guess you haven't been paying attention either.

If there's a tax, the rich can afford to figure out a loophole to avoid paying it.

There are many people who are happy to give the poor cash **right now** without them having to wait on the IRS - for a small fee of course, only 25-30%.

[minavasht]

128. Can you enlighten

us how those pesky rich avoid paying them in the states with sales tax?
And what cash-advance scams have to do with our discussion???

[POAS]

134. Have you never heard of incorporation?

That is one big loophole to avoid sales taxes.

[joeglow3]

228. That is only applicable if...

you are purchasing the products for re-sale. I don't think too many people would take this path, as it would VERY EASY to track and could lead to EASY prosecution.

[DadOf2LittleAngels]

201. Youre missing the point

"If there's a tax, the rich can afford to figure out a loophole to avoid paying it."

Its a crap load harder to find a loophole in a sales tax than it is an income tax..

[raebrek]

149. and if it is as advertised everyone would get a refund montly n/t

[DadOf2LittleAngels]

202. I was thinking the same thing..

allot of folks here crap on the idea without thinking of how to make it better..

Such as the checks going out once a month rather than yearly..

[joeglow3]

229. They are supposed to be monthly.

Granted, I still think it is a crap plan.

[pitohui]

136. what good does at the end of the year do?

who are we kidding? why don't people know that poor people, like rich people, actually need to eat and buy medicine every single day and maybe sometimes even put a roof over their head instead of a tarp?

hmm, let's see, i'm on ssi, getting $600 a month, already can't pay my bills, and now you're telling me, oh honey, just wait until next year and you'll get something back? i've already had to stick in gun in somebody's face to buy food long before wait until next year, do you think every poor person and every low income retiree will be willing to starve while waiting all year for this? at least some of them will not be willing to go down quietly, and who could blame them

:eyes:

[JeanGrey]

141. From what I understand food and medicine are exept

from the tax.

[raebrek]

150. prebate

You would get the prebate the at the beginning of the month before you spent anything. Has anyone read the boortz book about this??? I'm going to have to go to the library and see if there is a copy around.

Raebrek!!!

[ProudDad]

182. Right, they're going to be able to wait until the next year

to get their "rebate"??? :sarcasm:


The idea you're talking about is Gravel's hair brain scheme (one of his few but a major idiotic notions).


The only thing that would actually help the poor would be a Guaranteed Annual Income coupled with HIGHLY progressive income tax on individuals AND CORPORATIONS (the way it WAS until that fuck -- ronny ray-gun was installed as figure-head for the far right).

Nixon was ready to sign a Guaranteed Annual Income into law (to deflect attention from Watergate) but the far-right and "conservative" Dems and pukes in the Congress killed it.

[Oak2004]

226. I presume the poor can wait for their yearly refund to be able to afford to eat? n/t

[IronLionZion]

114. Yeah, will leftist Mike Gravel supports it too

so what do you think about that?

I'm curious as to why DUers don't want to tax people who are independently wealthy but don't earn any "income" because they don't work.

The fairtax supporters claim that it will lower the price of everything because it cuts a lot of administrative costs and will actually spur investments in this country. There's also a prebate for everyone.

What I really want to know more than anything else is that why aren't rich people supporting it? Why is this not a Republican policy position? Why are the Mikes, one of the most conservative Republicans and one of the most liberal Democrats, the only presidential candidates supporting it? If it's so damn good for the rich, then why don't we have it? Is our current policy not good for the rich? Don't the rich always get what they want?

I'm not going to take a stand supporting the national sales tax. But you can all bet your sweet asses that our current system is very unfair, needlessly complicated, and rich people game the hell out of the system and have been since the beginning. The first federal income taxes were during the civil war and the 16th amendment only passed in 1913.

[rucky]

123. Gravel is clear about the exemptions

for basics. He makes it less regressive that way.

[JeanGrey]

142. It should be obvious why the rich don't support it.

It will probably make a lot them pay taxes they now don't pay.

[IronLionZion]

171. Then why don't DUers support it?

Everyone consumes, and do so in direct relation to their wealth, so I don't understand why DUers think it is regressive. Poor people only purchase affordable stuff, and supposedly the price of everything will go down, and everyone gets a prebate every month, so I don't understand how it would be unfair to anyone.

Poor people get a lot of used stuff. I'm middle-class but I drive a used car. Second-hand stuff does not get taxed.

The wealthiest and most powerful opponents of the fairtax are tax prep companies like H & R Block.

It's laughable when DUers talk about the rich writing off a yacht as a business expense to avoid sales tax. That is one of the funniest yet most tragic things I have heard recently. As if 30% of the price of a yacht is even remotely close to the amount of income taxes a yacht owner already avoids right now with offshore tax havens and crafty accountants and attorneys. Businesses already make millions of dollars while operating on accounting losses because they write off everything including the kitchen sink...right fucking now. 30% of the most expensive yachts are but a tiny fraction of the tremendous amounts they are stealing from each and every one of us right now as we sit here pontificating about hurting the poor with regressive sales taxes.

[XemaSab]

195. But we DON'T consume in direct relation to our wealth

I spend roughly... oh... 100% of my income every month. Some months I have a few hundred left over, but then the next month I'll have an unforeseen expense that wipes out any meager savings.

Most wealthy people don't spend 100% every month. Most poor people do.

It's that simple.

[Amerigo Vespucci]

208. That's one key point that many people miss.

Information on the "Fair / National Sales" tax is easily found on the Web. There are a few key considerations. First, the 23% won't work. Any serious economist who's studied this proposal has said that the base amount would have to be somewhere around 40 to 60%, maybe higher. Add state taxes to that and it loses its marketing appeal pretty quickly.

Second, the average working person does spend a large percentage of their income on consumables. The "prebate checks" that are being discussed will only go to those at the poverty level or below.

Third, the idea of "abolishing the IRS" is crap, because a new government agency will need to rise in its place to administer all of the details (such as the aforementioned "prebate checks," above).

A study commissioned by NRF in 2000 found that a national sales tax would bring a three-year decline in the economy, a four-year decline in employment and an eight-year decline in consumer spending. Another study by the congressional Joint Committee on Taxation said a 57 percent rate would be necessary to replace all current federal tax revenue. A VAT would have largely the same effect.

http://tax-stuff.com/news/national-retail-federation-consumption-tax.html

[rucky]

121. So he's a Huckster for Wall Street, eh?

It would be harder for the average joe to save any cash, but it would be easier for people with extra money to pump it into TAX FREE investments. If you think there's a sharp contrast between rich and poor now, just wait.

[ptolle]

130. both feet

Between this and the both feet stomping foreign policy speech reported here the other day I'd say the both feet are the hucksterbee's and he's got them firmly planted in his mouth. Saw a small snippet from one of the SCLM outlets basically saying the shiny has worn off the hucksterbee's "surge" already. My initial research on the guy made me think that the more people got to learn of this fatuous twit the smaller the odds would be on his surviving the gopers nomination process and even smaller than that for the general election.And so far no one has mentioned his connections, tenuous or not, to the christian reconstructionist movement which IMO would cost him all but the most fervent fundie vote.My research, and conversations with people whose economic opinions and knowledge I respect tell me that both this idea and the various so-called fair tax proposals are regressive taxation policies of the most destructive sort.

[Zhade]

132. Calling this hit-the-poorest-hardest scheme "Fair Tax" is quite Orwellian.

NT!

[wordpix]

133. do we get health insurance with that tax? Canada does

[pitohui]

137. don't be silly

if you are sick and can no longer work, this tax will mean you can't even afford your food, let alone the medicine you already can't afford

they want us all to die unless we're of their class, they just don't quite have the balls yet to round us up and shoot us, they'd rather set it up so that we're forced to shoot each other to survive

have i said lately how much i hate these people?

expecting huckabee to provide universal health care is the joke of all time, it will never happen

[JeanGrey]

143. You know, in my heart I know that we will not get Universal

Health Care, no matter who gets elected. I wish I felt differently, but it is just more lies. Works good on the campaign trail. I am disabled and if I had to rely on medicare I may as well be dead anyway with my medical expenses. At the very least that will be expanded, and it is next to useless at times. You know the old doc charges 100 bucks, medicare approves 40 bucks and pays 32 bucks (if you've met your deductible or they can't find another loophole to deny it altogether). Then they cover about 1/10th of your drugs (which is better than what they covered the first time which was zero).

I remember when my poor Mom was in a nursing home. They came to her room, stood her up and walked her down the hall about twenty feet and back three times a week. For this they billed medicare about $1600 a month for "physical therapy".

When I get that bad I'm retiring to a cruise ship instead of a nursing home. Better service and cheaper.

I know I sound cynical but I just don't see it happening. And if it does, our income tax rate will probably zoom to fifty or sixty percent anyway. I know we say that we can get care for everyone for "less" than we are spending now, but if that were true Canada and England and the rest wouldn't have such high tax rates. I think that anyone that thinks we'll all be getting national health care for free is really deluding themselves.

And that poor girl that died waiting for the transplant - well don't even not believe the government won't have their own rules in place about what is "experimental" and what isn't. I know. I just had cancer this year and medicare was constantly blocking this treatment or that one.

Can you tell I'm depressed tonight? LOL Merry Christmas anyway (or happy holiday, whatever that is).

I'm just so fed up with politicians. Sometimes I think we should chose leaders by lottery. I doubt they could do worse.

[BushOut06]

145. If a loudmouth rethug racist swine like Neal Boortz supports it, then it's not a good plan

That's all you really need to know. Besides, as others have already pointed out, the real rate would be much higher than 23%.

One of the UnFair Tax's biggest fallacies is the assumption that 23% of the price of corporate goods consists of embedded taxes, and once the Fair Tax is passed, businesses will drop their prices. Bullshit.

[dailykoff]

146. buh bye huck

you've got the "common sense" of a nutjob winger :hi:

[Orsino]

147. And who is pushing for this new system?

I thought so.

[zanne]

167. He's at 10% in the NH polls......

I'm scared...I'm scared....

[LeftHander]

169. Really a 23% tax increase to the poor and middle class....

The wealthy will simply purchase good overseas...and GOP will put some sort of "the rich don't have to pay" loop-hole.

[raebrek]

172. HR25 info

For anyone caring to read about the bill. I hope I am not reposting something someone else has already posted.

http://www.govtrack.us/congress/billtext.xpd?bill=h109-25

http://www.fairtax.org/PDF/HR25_2007.pdf

Raebrek!!!

[ProudDad]

181. This is a stupid, regressive idea

but...consider the source(s)...

Jerkwads, right-wing and libertarian idiots like huckabee, paul, steve forbes...

We need a MORE progressive system of taxation not a more REGRESSIVE one...


But...if we continue to build networks in our local communities -- networks of cooperation and barter -- we can avoid this insanity as well as the coming collapse of the corporate capitalist system...

[XemaSab]

186. Why don't we just levy a 100% poor tax

and throw debtors in jail while we're at it? :shrug:

[Alexander]

197. Huckabee won't win New Hampshire, that's for sure.

This kind of lunacy guarantees that his candidacy is doomed.

[yardwork]

207. He's a genuine moran.

[AlphaCentauri]

211. I would favor a sales tax, I don't think is that bad

Also I would not trust professional RW liars.
Well if the sales tax eliminate all the others, including SSI, state... etc. and consolidate them in a single sale tax it would be a benefit for everybody, lets say tax include a contribution for a universal healt care system or to a election fund to eliminate private contributions to campaigns. Other thing to consider would be different % sales taxes for goods like 10% for food, 15% for cloths, 50% for tobacco and alcohol, 20% for automobiles.
But what I like about this tax is that if want to save money for a house I can save all my check with out giving it away for nothing.

[TheFarseer]

212. another vital point of the Fair Tax proposal

State and Local governments are subject to the tax. Corporations are not. Is this an elaborate scam to privatize EVERYTHING? Probably not, but it's a very fortunate side effect if you're an evil asshole like Neil Bortz.

[MrScorpio]

217. Simply, Huckabee to the poor: Fuck you nt

[Thickasabrick]

220. Even middle income republicans are pushing this - especially

the ones who have managed to accumulate a million or more in their tax-deferred retirement accounts. The tax savings would be a huge windfall for them.

Screw em.

[Amerigo Vespucci]

221. CBS News: "Scientology's Fair Tax Plot (Has Roots With L. Ron Hubbard)"

Scientology's Fair Tax Plot

The New Republic: Plan Backed By Fred Thompson, Other Candidates, Has Roots With L. Ron Hubbard

Sept. 7, 2007

(The New Republic) This column was written by Bruce Bartlett.
The basic theological tenets of the Church of Scientology are well known: a fanatical hatred for psychiatry coupled with a creation myth that involves an evil alien ruler named Xenu and his sundry galactic allies. The basic tenets of its tax policy are somewhat less familiar. But Scientologists promulgated and, at one point, heavily promoted a proposal that would replace all federal income taxes with a national retail sales tax (NRST). And the theology and tax policy aren't entirely unrelated: Xenu used phony tax inspections as a guise for destroying his enemies.

In a strange confluence, the Scientologist proposal happens to be nearly identical to one of the trendiest conservative tax proposals of the year, the so-called FairTax, which has been endorsed by John McCain and Fred Thompson, as well as second-tier presidential candidates Mike Huckabee, Tom Tancredo, Duncan Hunter, and Democrat Mike Gravel. Georgians John Lindner and Saxby Chambliss have introduced FairTax legislation in the House and Senate that would establish a 23 percent national sales tax.

But, when you mention any hint of the nexus between Scientology and the NRST - as I did briefly in a recent Wall Street Journal op-ed - you'll be denounced by FairTax supporters as a smear artist. This retort, however, is simply evidence that these FairTax supporters don't know the history of their own proposal. That's too bad. Perhaps if they understood its origins in Scientology, they might have a greater appreciation for its inherent flaws.

The story of the FairTax's provenance is one that I can tell with some firsthand knowledge. In 1993, fresh from a stint at the Treasury Department, I spent a few months at the Cato Institute. I was filling in for Steve Moore - now an editorial writer at The Wall Street Journal - who took a brief leave from his job as director of the think tank's fiscal studies program to advise former Texas Representative Dick Armey. It was there that I was visited by a man named Steven L. Hayes, the founder of group called Citizens for an Alternative Tax System (CATS) that promoted the NRST, and who was, as Moore pointed out to me, a prominent Scientologist.

It wasn't hard to figure out the Scientologists' motives for hawking the NRST. The IRS had refused to recognize Scientology as a legitimate church - a fact that seemed to enshrine their popular reputation as a "cult." To remedy this situation, Scientologists waged war against the IRS. At various points, the Church attempted to infiltrate the tax authority and even hired private investigators to examine the private lives of IRS officials. And the same impulse behind these measures led them to devise the NRST. One church spokesman told National Journal's Paul Starobin, "We thought, If this is happening to us, there must be a lot of people to whom this is happening.' ... How could some positive changes be made?" Since nearly every state has a sales tax, it would be a simple matter to get them to collect a federal NRST, rendering the IRS instantly superfluous, a ripe target for abolition.

As Starobin told the story, CATS wooed the Texas political elite, including Robert A. Mosbacher Jr., the son of George H.W. Bush's secretary of Commerce. Mosbacher urged Hayes to reach out to Jack T. Trotter, an attorney close to Texas Representative Bill Archer, the ranking Republican on the tax-writing House Ways and Means Committee. Although Trotter and Hayes held several meetings, nothing came of it. According to Starobin, Trotter feared that the Scientology connection would turn off too many potential supporters. (Hayes, for his part, has always denied that the church played any role in his group after helping found it.) But Trotter was hooked by the sales tax idea and wanted it expanded to include the payroll tax as well. He formed Americans for Fair Taxation (AFT) in 1995 to promote the CATS proposal, but without the taint of Scientologist involvement. AFT promoted the FairTax for a decade, elevating the plan to its current popularity.

By the time that Trotter had shunted the Scientologists aside, the church was losing interest in tax reform. In 1993, the IRS finally recognized Scientology as a legitimate religion, ending the rationale for a vendetta against the tax collectors. CATS basically withered. Its last tax return, filed in 2005, showed contributions totaling $1,725. A year later, the group appeared to be completely defunct. (Interestingly, in 2003, the group's tax returns listed my old colleague Steve Moore as a director.)

A brief digression: A few years after I encountered Hayes, he gained notoriety by suing an anti-Scientologist organization called the Cult Awareness Network (CAN). When CAN declared bankruptcy in the wake of this suit, Hayes purchased the organization's assets and name at auction. Overnight, CAN ceased to be a thorn in Scientology's side.

The reason I brought up the Scientology connection in the first place was not to create guilt by association. Rather, it was to explain that CATS had one very specific goal: the abolition of the Internal Revenue Service. Anything else that the NRST might accomplish was entirely secondary. And, in the rush to rid the world of the IRS, the plan's authors neglected some important details, not to mention some key facts.

For starters, the FairTax is deceptively calculated. When you think of a 23 percent sales tax, you think of paying an extra 23 cents on the dollar. That's how every sales tax in the world works. The FairTax, on the other hand, doesn't represent 23 percent of the pre-tax value of the item you bought, but the post-tax value of the item. So, under FairTax, you wouldn't pay $1.23 for a $1 widget - but $1.30, since the 30-cent tax is 23 percent of $1.30. How straightforward!

The legerdemain doesn't end there. Unlike every other sales tax in the world, the FairTax actually applies to everything - every pencil, every tank - the government buys. Unfortunately, the FairTax proposal doesn't take into account this increase in government spending. Thus, it will either provoke a massive cut in federal spending or a massive increase in taxes.

And what about the poor who bear the brunt of this highly regressive tax? The FairTax would track every household's monthly income and then cut checks to minimize the pain, a logistical challenge that will ultimately resemble some welfare state nightmare. What's more, this would cost gobs of money, forcing further cuts in spending.

For these and other reasons, every reputable tax expert who has ever looked at the FairTax has concluded that the true tax rate would have to be much, much higher than 23 percent (or even 30 percent) to work - and, even at that unrealistically low rate, the plan would inspire massive tax evasion. In short, the FairTax is a crackpot scheme from beginning to end. That would be true even if the Scientologists hadn't authored it.

[humbled_opinion]

222. Yeah thats probably on food too..

Guess we all need to start huntin for our diner...

[DanG2012]

227. cHucklebee

neoCON poster child

most likely has the same IQ as Fearless Leader

~ 90