Huckabee's sales-tax idea could be his Waterloo

Here's the problem for Huckabee. A national sales tax won't work to fund the U.S. government at current levels.
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You're right, it won't. But I think part of the plan is also to substantially cut spending and waste - so that we are not operating on "current levels" anymore.

Oops,

Looks like God's gift can't pay Paul after robbing Peter.

P.S.
If there's anyone out there who doesn't know the bookshelf cross behind Huckabee in his recent T.V. ad isn't the most cynical, contrived ad in the history of T.V. - you are incorrect.

Ron Paul has the best plan for this, check outd Ron Paul .com issue on taxes.

Better repeal the 16th Amendment first; otherwise you will have both a national sales tax and an income tax.

This article is just another angle in the never ending attempt of the corporate media to get rid of the Huckabee candidacy. The Fair Tax was not his idea - it was produced by the best economic minds in the country. To begin with, it would decrease the national budget by $240 BILLION every year, because that is what the IRS consumes. In addition, the very rich now pay no taxes and that would put them on a level playing field with everyone else. People, don't be fooled by those who are neither as intelligent nor as altrusitic as the man who wants to be a servant President.

I don't think i'll have a problem with evangelicals
unless they nominate mike huckabee. 20% of them won't
vote for mitt because he's mormon?! In a race this close
they are the deciding vote! Try using that same logic
when electing a CEO and watch how fast the company
declares bankruptcy, no matter how baptist he is.

All these talking heads in the media are so quick to level final judgment on so many topics for which they clearly are not qualified.

The fair tax is just another example of how Huckabee is a visionary leader who has someplace to take our country.

The fair tax is simple yet complex in that it requires us to think completely outside of the box we are used to with the current income tax.

I was in corporate business decision-making rooms for more than 15 years. Then I had a financial planning practice for 4 where I saw first-hand how families and small business owners are being impacted by our current code. Now I work in a corporate environment again in the financial services industry. Throughout all these experiences, there is one common thread: Our current taxation system is holding down our corporate and personal productivity and thus our national productivity. To understand the need for a fair tax or any proposed solution for that matter, we must first understand how much our current system is hurting us. I am not referring to issues of class warfare, high taxes or other buzz words. I am referring to our system is very, very inefficient and leads people and businesses in far to many cases to do things that lessens their tax burden but in doing so do things that are not in their best long-term economic interest.

Mike Huckabee understands that these problems are intrinsically tied to many of the other challenges our country faces. Most candidates are too afraid to gore this sacred political cow.

Because Huckabee is not afraid to take this issue on and provide needed leadership, likely at great personal political cost, is just another example of why I am a fervent supporter of his campaign. If Mike was only interested in adding another notch to his political title best, he would avoid this issue. He doesn't need to take it on for his own gain. But our country needs to have this discussion.

Merry Christmas fellow Swampsters...

... and too all the other bloggers... enjoy... and see you Wednesday!

Well, maybe we just keep it the same, it seems to be working just great, and we've got to keep all those special interests and lobbyists from the last 4 decades (as mentioned in the article) Happy. After all they were the "realistic" ones that made all this equality and prosperity happen, right?? Most of the ideas candidates run on will not ever come to fruition--hence the lack of change(s) for the last half-century or so. What is truly un-realistic is to believe that the current way of running and paying for gov't is sustainable. While the other candidates (& pundits) want to sell their change AND their experience at doing it the way its always been done---, sooner or later we actually have to use NEW methods, even if it means scaring those who have enjoyed the benefits of the old system. Huck will possibly (maybe probably) lose because he isn't willing to just leave it the same, and use the change word every 4 years, when people are tired of the incompetence of the last 4. Eventually we will either begin giving credence to new ideas and candidates with new ideas...including the Huckabees, Pauls, Kucinic's, etc.. (look now at what Ross Perot ran on 20 some years ago.. He nailed every issue the candidates are now running on. But at the time his ideas were unrealistic, he angered to many life long politicians, and the media found out he was crazy..actually claiming the Bush family was doing unwarranted spying!! Thank God we uncovered his unrealistic nature in time.

Huckabee can't pass a fair tax on his own without the support of Congress; but, his notion that the current federal tax system and the IRS are in need of radical reform is correct in my opinion. And, I will bet very few people would dispute that as fact.

If Huckabee is elected, I suspect we will have some real dialog in regards to tax reform, and I suspect the nation in the end, will be better for it. Whether the end result is a fair tax a flat tax or some other taxing scheme, we need to dump the current IRS code and start over. We need to do it now.

It amazes me that there are those who actually don't understand that the Fair Tax ELIMINATES income taxes. Why would you need your mortgage deduction when you aren't paying income taxes in the first place? The Fair Tax empowers the taxpayer instead of enslaving the taxpayer under this system. It taxes consumption, not productivity. Why can't the pundits be honest about the system-whether or not you like Mike Huckabee? The people want fundamental change in the system. Give it to them.

As a Catholic, I have to say, in response to Adam, you may criticize Evangelicals for not voting for Mitt Romney, but it is a far stretch to criticize Mike Huckabee for the voting record of Evangelicals.

On the FairTax, it is the fairest way to fund the government, period. Here's why: the corporate income tax forces American made goods to cost more than foreign goods. So, people buy foreign goods and American companies have to lay off workers. The income tax takes jobs away from American citizens and encourages outsourcing.

In addition, the income tax is slanted against workers. The labor for cash transaction is the only transaction in which the government does not allow a deduction of some inherent value before determining taxable income. If I trade a $100 stock for $100 cash, I have no income and pay no tax, but if I trade $100 worth of labor for $100 cash, I must pay tax on the whole $100. The FairTax places workers and investors on a level playing field.

Despite emerging stories from Huckabee's checkered past such as the Wayne Dumond affair or his past AIDS bigotry, a true portrait of Mike Huckabee as a radical reactionary and dangerous extremist has yet to be painted.

Here then, are the Top 20 Moments in Mike Huckabee's Extremism:

Huckabee Calls for the Quarantine of AIDS Victims

Huckabee Enables the Politically-Motivated Parole of Repeat Rapist/Murderer

Huckabee Offers Faith-Based Pardons

Huckabee Undermines the Teaching of Evolution

Huckabee Speaks for God

Huckabee Speaks to God

Huckabee Claims God Behind His Rise in the Polls

Huckabee Proclaims His Theology Degree a Unique Qualification to Fight Terrorism

Huckabee Flip-Flops, Calls for Federal Abortion Ban

Huckabee Calls for Consumption Tax, Abolition of the IRS

Huckabee Vows to Take Nation Back for Christ

Huckabee Declares Culture War in 1998 Book

Huckabee Declares Women Should Graciously Submit to Their Husbands

Huckabee Predicts Victory over Islam at the End of Times

Huckabee Boasts About the Theology Degree that He Doesn't Have

Huckabee Destroys His State Computer Records - and Church Sermons

Huckabee Offers State Appointments in Exchange for Gifts

Huckabee Uses Wedding Registries to Furnish New Home

Huckabee Offers Clemency to Repeat DWI Offender (and GOP Donor)

Huckabee Intervenes to Save Dog-Killing Son from Legal Jeopardy

The national sales tax was the only reason I support Huckabee, as it would eliminate the US version of the Gestapo, the IRS. What this editorial also does not mention are the trillions of dollars that would return to the US economy from offshore "investments" that hide from the IRS.

This is a very complicated issue, and the other candidates either love the socialism the current tax system provides (and the Dems want to see it grow), or they see only the corporate welfare the huge tax breaks provide (a favorite of the Repubs).

If the typical American was paid their full salary, and then forced to fork over 40% (or more) to the bloated bureaucracies in our taxing bodies, there would be a national uprising. The Huckabee plan does not penalize working people for working hard, and allowing them to keep the fruits of their hard work.

A smaller, more efficient government is hardly what career politicians like Hillary, Barrack, and Rudy want; the bloated tax system allows them to feast at will, hire cronies/families, and give little in return. It is a larger form of government welfare.

I do not trust these "journalists" anymore than I do the career politicians. Let them try and run a small business, and see how long they can last.

Can someone please explain how penalizing consumption in this manner wouldn't kill economic growth?

I've always been told that consumer spending is good for the economy.

I hate to burst peoples' bubble on this, but the "Fair Tax" will not eliminate the IRS. There will need to be an enforcement/collection agency of this tax. If it's not the IRS, then it will be another gov't bureacracy.

The "Fair" tax is unobtainable from our current position.
Wherein, the word "visionary" quickly changes meaning to the word "Pipedream" as some of the Huckster's other offers.

All goals can be met with the appropriate stages of change within the correct direction such as a Flat tax plan offered by Fred Thompson.

It does not require the 16th Amendment to be repealed and it is also implementable today which will pave the way in altering our situation for future changes towards a Fair tax plan.

Fred's Flat tax plan is therefore much more than merely visionary, it is a demonstration in providing tangible results within reality in the correct direction.

Folks, it simply doesn't get any better than that.

Thompson Plan for Tax Relief and New Economic Growth
http://www.fred08.com/virtual/taxrelief.aspx

Fair v. Flat Tax Plans Which is better? ( When page opens click on the words “Fair v. Flat” and the video will start. )

http://www.foxnews.com/video2/launchPage.html?120907/120907_jer_taxes&Flat%20vs.%20Fair&Journal%20Editorial%20Report&%27Journal%20Editorial%20Report%27%20rates%20GOP%20candidates%27%20tax%20plans&Politics&-1&News&Video%20Launch%20Page

The FairTax is brilliant! The President's "tax panel" has STILL not disclosed the criteria for their sales tax calculations, which they say are much higher than 23%. (Can you say bias?) The fairtax may not pass due to the math-challenged (like the bloggers here), or corrupt politicians, but it IS the right tax policy. I'll vote for Huck, at least because he knows what's RIGHT, even in the face of an evil coercive-taxation governemt like ours.

There is something to be said for introducing a small federal sales tax to replace some corporate taxes and make American goods more competitive on the global stage. This is what Canada did when it introduced a federal goods and services tax. And reasonable idea though it was, it is well hated, led to the fall of the government that introduced it, and is currently being eliminated, one percentage point at a time.

To use a sales tax to eliminate income tax, however, is madness. The rich, who don't need to consume a high percentage of their income, could choose to consume even less of it in the United States by shopping overseas. The poor would get some sort of a rebate to make up for the tax they pay on essentials, but the working and middle classes would take a huge hit, having no choice but to consume their income.

It really isn't worth much ink (or many gigabytes or whatever these are) to talk about a policy that isn't going to go anywhere, but the demagoguery of attacking the IRS, when the real problem is inequitable taxation favoring the most privileged among us is a classic Republican strategy. Convince poor people that they will benefit if they just do a little more for the poor oppressed richest folk, and you can implement harmful, backwards policies like this one.

The sales tax proposal will kill the middle class and allow the rich to get richer. Think about paying 20% more on your cars. And another 20% on your gasoline. Forget Christmas, you won't be able to afford it. Don't worry about clothes either. There will be a lot of black market shopping going on and so the goverment will have to raise the tax even more. I would hate to see Huckabee as the CEO of this nation.

How does having a national sales tax eliminate the IRS?

And paying 23% on consumer goods would kill growth faster then the the Great Depression.

Theory is one thing, reality is another.

Huckabee's Waterloo?

I think the entire Republican Party surrendered when they elected George Bush twice and then followed that up with all of these crappy Presidential candidates in 08.

http://www.youtube.com/watch?v=ZpUz5zXywhY

We still wouldn't need the IRS to collect on the fair tax, it would be collected at the state level. Just as local state taxes, millages, etc are...

Terry, "I hate to burst your bubble." You obviously don't know anything about the fairtax. It is added to the price of the goods. No one enforces it except the owner of the store.

FairTax can't pass? You "experts" thought Huckabee couldn't possibly get THIS far. You'll be wrong...twice.

People have been investing their whole lives and predicating billions of business and personal financial decisions using the current codes as their guide. The fair tax looks good on paper if you are starting a new country from scratch. Implementation midstream would be disastrous to our economy. No respected economist from literally hundreds, support this bonehead idea. It is also an idea congress will NEVER get behind and Huckabee knows it. Now, that is a real snake oil salesjob!

Just think of the great car sales before the tax goe into effect, and the dirge of sales after the tax goes into effect: $25,000 before & $30,750 after....Such a Deal!

Question: As one of the middle class income group I am wondering If I will be able to afford a new $30,000 automobile if the Huckabee tax plan is implamented ? The majority of the taxed citizens are in this boat with me. How will this affect the national reconomy?. JUST CURIOUS

Why is this being called a 23% tax? It's not; rather, it is a 30% tax. As envisioned, something that cost $1 without the tax would cost $1.30 with the tax. That's 30% taxation, not 23%. In any case, it is a tax that falls hardest on the people who can least afford it: the poor and people on fixed incomes. Add to that the effects of the inflation tax (and inflation is going to get much worse before it gets better, when dollars currently circulating overseas are repatriated due to the dollar's abandonment as the global reserve currency), and you have a situation in which poor and people on fixed incomes are going to be CLOBBERED by such a tax.

RSmith,

What if I as a business owner decide to sell my goods with the fair tax, which gov't agency is going to enforce it?

If you are going to pass this, you better first eliminate the 16th amendment like I stated above.

It's wonderful watching the same people who shoved religion down everyone's throat the past seven years now suddenly deciding that religion and politics are a bad mix. Could it be that Huckabee is a real Christian, which means he's not too hot on screwing the poor? The guy's a joke, I'll admit, but at least he's not a creep like Willard Romney.

Just read the book. I can't understand how people don't see this as a wonderful idea. Whether or not it can pass right now is no reason not to pursue it. The current system is broken. The IRS is the only group that can hold you guilty until proven innocent.

Give me my money, let me pay taxes when I buy goods, and get out of my way.

We make the country work, not politicians.

Phil and John S: A sales tax would certainly hurt the economy, IF it were tacked onto the existing system. But the whole point with the fair tax is that you would get your whole paycheck! More pay equals more spending. Not only that, but you would be untaxed on necessities via prebate. Also, there is no tax on used goods (cars, homes, etc...). Another HUGE thing that so few seem to understand is that the current prices on goods and services carry an embedded tax of 22% due to corporate taxes. Under the fair tax, corporate taxes go away along with embedded taxes due to free market competition. So that means the price of goods would drop 22% and then the 23% sales tax brings you back up to the same price for goods that we're currently paying! Exept now you have your whole paycheck. Talk about an economic boom in spending! As a middle class frugal budgeter, I would end up with an extra $1,000 per month under the fair tax!! That's what it would feel like to have the heavy hand of government lifted off my middle class back...$1,000 per month!!

It's interesting to see two of Mr. James' quoted experts were rather vague, as if the organizations themselves made them. The other is an employee of the Treasury Department (IRS?). Nothing wrong with trying to protect ones job now, is there? Kind of like the fox guarding the hen house? When something is right and just, you'll always see the beneficiaries of injustice come crying and accusing even going as far as making false statements to protect their interest. The Fair Tax Act is the single greatest piece of legislation since the signing of the Declaration of Independence. Could it possibly be worse than the present tax code? I think not. Mr James' "independent analysts" say the Fair Tax 23% sales tax would not allow our government to operate at it's current levels. But Mr. Franks, neither does our present system. Fair Tax Now! Mike Huckabee for president 2008!

To begin with, it would decrease the national budget by $240 BILLION every year, because that is what the IRS consumes.
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Wrong, it won't reduce it a penny. You're going to need the same beaurocracy to count the sales tax as you have counting the income tax. This argument is a deliberate lie by the unFAIRtax people and Huck.

I don't believe the article (that is, I don't believe the writer really knows what he's talking about, and some of the comments have fairly well pointed out the holes in his argument), nor do I believe most of the comments posted here that state in such petulant, vituperative, almost violent terms not simply opposition to Huckabee's plan but pure hatred towards the man, towards his party, towards George Bush, etc. ,etc.
We've become a society that loves to vituperate. And... to hell with reason.
In that case, perhaps we'd better vote for Jerry Springer for president, eh? He'll give everyone their chance to pile on. That's what people really seem to want more than anything else. They wait patiently while Jerry explains the supposed facts of the story, but everybody knows they're really waiting till they can shout "Woo! Woo! Woo!" when the guests go for each other's throats.
And that's what these "comment columns" have become, too, on nearly every Internet forum. What it's all really about is getting in one's gratuitous shot, showing who can get in the meanest cut. Like, I remember, we used to do in 7th grade.
Is that it - that we're a nation of emotional 7th graders?
God have mercy on our country. Though it may be too late.

In the Janet Hook piece, the Fair tax rate is 30% - not 23% - using the commonly used description of sales tax rates readers are familiar with.

Nick P

I wonder how many of you have really read the fair tax bill that is already in congress comittie now. As for cars,auto parts are exempt from this tax as are home building materials The biggest drain on our econemy now is the social spending on imigrants that currently don't pay taxes. With the fair tax this will greatly increase our revenues. And while we're at it let's do a national lottery to pay off the national debt! Thirty three percent of income taxes collected now pay only the interest from the debt. Probably more since Bush has been spending out of control. Before you knock the fair tax read the bill. It's out the for everyone to see. Oh, and it's only a couple pages long instead of volumes long.

Where to start. . .

To the author, Frank James, let's see. Bruce Bartlett publishes a column about the FairTax that is almost completely inaccurate, then Janet Hook quotes him. So now, you quote Janet! I suppose you assumed that these other "journalists" did their homework. They didn't.

Please get informed before you criticize. Talk to Congressman John Linder or read the FairTax book. A sequel is coming out in March that addresses many of the criticisms, probably all of the ones you mentioned.

To commenter "John W." who agreed that the FairTax won't provde the same funding and that part of the idea of the FairTax is to reduce government spending, you are incorrect also.

And lastly, to commenter "Terry" about the 16th amendment. . . If you had read the book and/or the bill you would know that the FairTax - as written - would go into affect on Jan. 1 of the year AFTER the 16th amendment is repealed and ratified by the states.

Please EVERYONE, read the book and go to the web site. This new method of tax collection (that's all it is) would make us (U.S.) the most tax friendly country in the world! Look at the "Irish Miracle" and what has happened to their economy after they dramatically lowered taxes!

http://www.fairtax.org

It's getting very tiresome, as a knowledgeable supporter of the plan, having to respond to critical article after critical article penned by folks who haven't the slightest idea about which they speak. It's frightening to see the level of laziness pervading the journalism profession. Actually to call most of these articles "journalism" would be extremely generous. Point after point is made using false premises, inaccuracies abound, lies are propogated, agenda-driven previous authors are quoted, and worst of all, most of these articles are written without the person responsible taking a single moment to actually do any real research on the topic at hand. Don't take my word for it, or take the word of the authors responsible for most of this highly shoddy writing and opining. Do as I did, please. Find the facts, ask questions, get ACCURATE answers, and make up your mind for yourself.

No one has ever brought up a single objection regarding a sales tax plan that hasn't been thought of and addressed in the Fairtax legislation. The millions of dollars spent developing the plan weren't spent for naught. Top economic minds from institutions such as Stanford, MIT, and Boston U had a hand in developing the plan and endorse it.

The Fair Tax would eliminate the IRS, and leave the collection of the national sales tax up to the states. Furthermore, the NST would largely be offset by the elimination of the underlying taxes already imbedded in the cost of goods-- so even a NST of 40% might only amount to 20%, after prices drop 20% due to the elimination of all of the other taxes.

Compare this rise in prices to what you already pay in income and payroll taxes! It's a bargain.

The NST would be much broader than the current income tax, and many who aren't paying taxes now-- including drug dealers-- would have to pay. Many who dodge the income tax won't be able to dodge the NST.

This will make our exports much more competitive, and this won't hurt the poor at all, since they'll be mailed a tax prebate every month under this plan.

The Fair Tax is both progressive and pro-business. The only losers will be the tax jackals in Washington D.C.

I don't care that Huckabee is a so-called christian. What bothers me, is that he has consistantly used his so-called religious accomplishments to boost his campaign as well as attack others.

The only thing Huckabee wants you to think is that he is some how qualified to be president because he used to be a baptist minister and is a so called true "Christian Leader".

Look through his "Awe Schucks" act and see him for what he really is. Mike Huckabee is a wolf in sheep's clothing that uses the religion card to push his own agenda.

MIKE HUCKABEE WANTS MORE OF YOUR MONEY.

FACT: Mike Huckabee signed a sales tax hike in 1996 to fund the Games and Fishing Commission and the Department of Parks and Tourism (Source: Cato Policy Analysis No. 315, 09/03/98)

FACT: Mike Huckabee supported an internet sales tax in 2001. (Source: Americans for Tax Reform, 01/07/07)

FACT: Mike Huckabee publicly opposed the repeal of a sales tax on groceries and medicine in 2002. (Source: Arkansas News Bureau, 08/30/02)

MIKE HUCKABEE WANTS EVEN MORE OF YOUR MONEY.

FACT: Mike Huckabee signed bills raising taxes on gasoline (1999), cigarettes (2003) and a $5.25 per day bed-tax on private nursing home patients in 2001. (Source: Americans for Tax Reform, 01/07/07 and Arkansas News Bureau 03/01/01)

FACT: Mike Huckabee proposed another sales tax hike in 2002 to fund education improvements. (Source: Arkansas News Bureau, 12/05/02)

MIKE HUCKABEE ON TAXES.....

FACT: Mike Huckabee’s substantial tax hikes far surpassed his modest tax cuts, with the average tax burden increasing by a whopping 47% over his tenure. (Source: Arkansas Democrat-Gazette, 10/09/07)

FACT: Mike Huckabee opposed a congressional measure to ban internet taxes in 2003. (Source: Arkansas News Bureau, 11/21/03)

FACT: Mike Huckabee in 2004, he allowed a 17% sales tax increase to become law. (Source: The Gurdon Times, 03/02/04)

MIKE HUCKABEE TOUGH ON CRIME....

FACT: Mike Huckabee granted 1,033 pardons and commutations, including 12 convicted murderers, one of which "Wayne DuMond" shortly after his release moved to Missouri where he raped and murdered Carol Sue Shields. He was convicted and sentenced to life in prison in Clay County, Mo., in 2003. He died in prison in 2005.

MIKE HUCKABEE THE REAL "CHRISTIAN LEADER"....

FACT: Mike Huckabee stole over $70,000 worth of furniture from the Arkansas governors mansion.

Google: Counting the furniture Huckabee takes his office furniture; a conflict on Mansion gift. (Source: Arkansas Times 12/14/06 Leslie Newell Peacock)

FACT: Mike Huckabee set up a nonprofit entity so he could give paid ``inspirational'' speeches without having to disclose the donors.

Google: Huckabee's Boom May Be About Ready to Bust: Margaret Carlson (SOURCE: Bloomberg Dec 12, 2007 Margaret Carlson)

FACT: Arkansas lawmakers criticized the registries, which were listed as "wedding" registries, even though the Huckabees have been married since 1974.

MIKE HUCKABEE ON ILLEGAL IMMIGRATION....

FACT: Mike Huckabee supported in-state higher education benefits for children of illegal immigrants.

FACT: Mike Huckabee opposed a federal raid of 119 illegal immigrants at an Arkansas Tyson poultry plant, 107 of whom left the country either voluntarily or through deportation.

(SOURCE: Melissa Nelson, "Huckabee Risks Political Fortunes To Denounce Immigration Raid," Associated Press, 8/5/05)

MIKE HUCKABEE A GOLD DIGGER......

FACT: The ethics commission fined Huckabee $1,000 for failing to report that he paid himself $14,000 from his 1992 U.S. Senate campaign and $43,000 from his 1994 lieutenant governor's campaign.

FACT: Huckabee accepted more than 300 gifts worth at least $130,000, ranging from $3,700 cowboy boots to a $600 chainsaw.

Google: Huckabee rivals unearth ethics complaints (Source: POLITICO Kenneth P. Vogel Nov 21, 2007)

Look through his "Awe Schucks" act and see him for what he really is. Mike Huckabee is a wolf in sheep's clothing that uses the religion card to push his own agenda.

Huckabee stood in front of all America in the debates and LIED proclaiming he was the only one on stage with a theology degree. HE DOES NOT HAVE A THEOLOGY DEGREE. Using religion to pander for votes, calling himself an evangelical christian out of one side of his mouth while lying out of the other. He drinks a different kind of Jesus juice alright.

He is bought and paid for - u tube /watch?v=0pRDxY42BpU

More principled and honest Huck - http:// www newsweek com/id/78241

Like when he was governor, if you dont agree. expect to be silenced. Not accepting any negative comments. u toob /watch?v=n-BFEhkIujA

When you look at the candidates, ask yourself this question. Why is this person running for office? Then, when you get to Ron Paul remember unlike ALL other candidates - Never voted himself a pay raise, never taken a gov paid junkett, doesn't participate in the gov pension program, gives part of his staffing budget back to treasury every year. Not to mention, right on iraq, right on patriot act, right on Iran...hmmmm

Huckabee's national sales tax proposal is a great idea and it doesn't take a C.P.A. to understand why. Simple is beautiful. Encouraging saving and earning is beautiful. Elimination of BILLIONS of dollars wasted in meticulous compliance with an enormously complicated tax code is beautiful. Making American products more cost-competitive overseas is beautiful. TRANSPARENCY is beautiful. Structuring government taxing in a way that shows the FULL amount that is taken from us will bring HONESTY and accuracy to the Big-government vs. Small-government debate.

Is Russ Limbaugh helping the Demarcates take the White House again in 2008! This time he has additional help….

Does the 2008 election look a lot like the 1992 election? Is Rush Limbaugh selfishly trying again to influence voters away from other conservative candidates the same way he tried to influence Ross Perot voters away in 1992. Well, it did not work then and it will not work now. In 1992 Limbaugh handed the Presidency over to Bill Clinton, but then continuously cried for months that the defeat was due Ross Perot and his supporters, not Limbaugh trying to shape the election with his Kool-Aid drinking followers. The only difference this time is Limbaugh has the help of people like Ann Coulter, Sean Hannity and Laura Ingraham to help the conservatives get their heads handed to them by the liberals at election time.

The conservative voters who are supporting Mike Huckabee are not Rush Limbaugh, Ann Coulter, Sean Hannity and Laura Ingraham Kool-Aid club members. They are hard working, God-fearing Americans who do not need elite talk show hosts to filter their candidates through the Wall Street elite Boardrooms before elections day, as Limbaugh did in 1992 when Bill Clinton took the White House away from President Bush.

P.S., was Ross Perot Right about immigration and NAFTA? “Well, the historical lesson is clear. The Carnegie Endowment for International Peace reports, "Real wages for most Mexicans today are lower than when NAFTA took effect." Post-NAFTA, companies looking to exploit those low wages relocated factories to Mexico. According to the Economic Policy Institute, the net effect of NAFTA was the elimination of 1 million American jobs. Can you hear that “sucking sound” of jobs going to Mexico and over seas that Ross Perot was talking about?

America’s Elite Talk Hosts’, If you don’t have the “set” to run for President your self, then shut the #^@$% up! You are hurting America with your preconceived selecting of Wall Street candidates.

http://www.ronpaul2008.com/issues/debt-and-taxes/
Go here for info on Ron Paul his ideas for taxing us. I think he speaks clearly about how we are now taxed and his ways to correct it. From Medford, Oregon we don't like taxes especially local ones.

You quote two economists, Bartlett and Gale. Go to fairtax.org and you can see a list of more than 70 who say it does fund the government. Most with much better credentials than either Bartlett or Gale.

I've been reading the columns and editorials that have been appearing in newspapers across the country. Whoever first said that the FairTax would be easy to demagogue sure had it right. For instance, there's this article by Janet Hook writing in the Los Angeles Times. In some newspapers this column appeared with the headline "Huckabee Campaigning for 23% Sales Tax." Now we all know that not all that many people read newspapers anyway .. and many who do only scan the headlines. Can you imagine what someone would think if they just read that "Huckabee Campaigning for 23% Sales Tax" headline? Why, it would positively scare them to death! There is no way in the world an uninformed (government educated) person reading that headline would vote for Huckabee. Is this intentional or just carelessness? Is the headline accurate? As far as it goes, yes. But it certainly doesn't even begin to cover the story, and this is what we're facing in the fight for this tax revolution.

In this article Janet Hook wrote that the President's tax reform commission rejected the FairTax. Did Janet Hook know that the terms of the Executive Order creating this commission prohibited them from considering the FairTax? If she didn't know that, why not? Did she just fail to do her job? Or did she get that line about the tax reform commission from someone else, and just copy it?

I read another column in the past few days where the FairTax critic said that poor people would have to report their income to the federal government every month. Where do they come up with this complete nonsense? Why are so many people writing such absurd things about the FairTax? Doesn't anyone do any research out there any more? It seems that now when you write a column you just collect a bunch of things others have said on the subject you wish to address and repeat them without any further inquiry.

I'll have more to say about this when we come back. In the meantime .. "FairTax, The Truth" will be hitting the book stores on February 12th. You can order a copy now from Amazon.com. This is obviously a tough fight. There are a lot of people out there who have much invested in our current tax system, and it is clear that they are going to fight like hell. Congressman Linder and I think that you'll find this new FairTax book will answer your questions, and it certainly will give you the ammunition you need to respond to the critics.
(from Nealz Nuze - 26Dec07)

The Real Cost of the Mortgage Interest Deduction

The FairTax could lower the cost of a $250k
home by $500 per month

by Joseph Lolli, CCIM
© 2007

With over 72 co-sponsors, the FairTax (HR.25) is a bill in Congress that would be a paradigm shift in the way the federal government generates revenue. This revenue neutral proposal would abolish taxing income and wealth and replace it with a national sales tax on all new goods and services. It would not tax used items such as existing homes or investments (including real estate) and it would not tax business or investment transactions such as commercial brokerage, attorney or appraisal fees and other related closing costs. In addition, it doesn’t tax education tuition as that is also considered an investment… in human capital. The FairTax would only tax consumer purchases of new goods and services at their retail point of sale.

The National Association of Realtors (NAR) is vehemently against any tax reform proposal that would threaten the current tax code’s “Mortgage Interest Deduction” as it is the real estate industry’s “sacred cow” and is the result of substantial lobbying on the part of NAR. The real estate industry trade group claims that the “MID” provides homeowners with a substantial tax benefit that can reduce the cost of home ownership. As such, this deduction must be defended at all costs.

But there is a bill currently in congress that already has around six dozen co-sponsors. It is a proposal that would substantially revolutionize the method our government uses to generate revenue and make the mortgage deduction…and all other tax deductions… a moot point. “The FairTax”®, HR-25, is a tax reform bill that would abolish the entire Internal Revenue Tax Code, negating the need for any tax deductions, including the sacred MID. The FairTax would change the basis by which taxes are collected. Instead of taxing income and wealth generation, the FairTax would simply tax retail spending and consumption by the final end user.

With the FairTax plan no federal income or employment taxes are withheld and taxpayers would be able to keep their entire paycheck. This would allow a homeowner to use untaxed dollars make their entire mortgage payment instead of having to endure the complexity of paying their mortgage payment with after tax dollars and then claiming back part of it in the form of an interest deduction.

In order to demonstrate the difference between the current system and The FairTax, let’s dissect a typical homeowner’s monthly payment and examine exactly how much help the MID provides a typical homeowner. We do this by calculating exactly how much income the typical homeowner must earn each month in order to be able to make that monthly payment.

Sample Scenario: An existing home sells for $250,000 with the buyer paying 20% down (the minimum down payment required to finance without private mortgage insurance or “PMI”, which is the extra insurance lenders typically require for loans that exceed 80% of the collateral value) and financing the $200,000 balance at a fixed 6% interest rate over 30 years. The monthly principal and interest payment is approximately $1,200. Under current tax law, the owner is able to deduct the interest portion of that payment from his/her taxable income, reducing the amount of actual tax owed. At the end of the first year of a 30 year amortization schedule, the mortgage balance would have been reduced by $2,456. The total of payments that first year is $14,400, so with $2,456 being principal reduction, the remaining $11,944 would be the deductible interest.

Assuming this homeowner is in the 28% tax bracket, this deductible interest provides the owner with $3,344 in direct tax offset. (The 28% rate was applied overall in this example to gross income for purposes of brevity and simplicity. The author acknowledges that actual amount of tax and deduction would be marginally less than what is stated here due to the multiple progressive tax brackets. As such, the benefits of the MID would ALSO BE LESS than what is stated here.) You either pay the tax with those funds or you can make your house payment with it. On a monthly basis, that’s approximately $280 pre-tax earnings that can be applied toward that $1,200 payment, leaving $920 that must be paid using after-tax dollars.

The IRS takes 28% from the homeowner’s gross earnings and FICA deducts an additional 7.65%, removing 35.65% before this taxpayer ever gets to see her paycheck. Therefore the $920 portion represents 64.35% of the total amount of earnings needed to make the balance of the monthly payment. In order to spend $920, the homeowner must first earn $1,430. Add back the $280 deductible interest portion and the total amount of earnings needed to make a $1200 payment is $1,710.

So what is the MID worth? Without that mortgage deduction, the entire $1,200 payment would have to be made using after-tax dollar and the total amount of pre-tax earnings needed would be $1,865. This means that the mortgage interest deduction provides a net benefit of approximately ($1865-$1710) $155 each month.

So what if the FairTax becomes law and replaces the existing tax code? How would that impact the cost of homeownership?

The FairTax is only applicable to retail sales of new untaxed items. As the above scenario describes the purchase of an EXISTING home, this sale would not be subject to the FairTax and the owner could simply make the entire mortgage payment using gross earnings. With no payroll or income taxes withheld, the owner would spend untaxed earnings which would require making only the $1200 each month needed to cover the payment. Compared to the MID scenario above, the FairTax represents a $510/month savings over the cost under the current tax code.

Again, since the FairTax is only applicable to the final retail sale to the end user, had the above transaction been for a NEW home, here’s how the inclusion of The FairTax would impact that same homeowner.

The FairTax abolishes all income taxes for both individuals and for businesses. In addition the FairTax doesn’t apply to “B to B” transactions. In other words, “business to business” sales that would include all of the costs associated with the construction of that new home are not subject to the national sales tax imposed by the FairTax.

Think about all the various construction costs that went into building that new home. Now consider the various amounts of income taxes that were paid by the land developer, the builder and the general & sub-contractors that constructed the dwelling. Also consider all of the various material suppliers that provided the components for the construction of that new home. This includes such items as lumber, wiring, pipes, fixtures, appliances, carpet, shingles, etc, in that new home as well as all of the labor costs associated with its creation. Each of those businesses (hopefully) made a profit on their contributions to the new home’s construction. Each of them paid taxes on the profits generated by the sale of those materials and the profits from the labor that was provided to the builder and the developer. All of these taxes contribute to the ‘embedded cost’ that is ultimately passed on to the home buyer via a higher sales price. This is true not just for new housing, but for virtually any new product or service produced in the U.S. With the FairTax, all these costs are eliminated.

It’s been estimated that these “embedded taxes” contributes between 20-25% to the total cost of virtually all new products, including the cost of a new home. The actual cost to build a new home would be commensurately less if all those tax components were removed. This includes not only the actual income taxes paid by those profiting by its construction, but it also includes tax related costs of documentation, accounting & compliance that normally are incurred by builders, developers and the suppliers of materials that go into the construction of a new home. Once these embedded costs are removed, the competitive market would reduce the retail price of that home by the amount of cost savings.

For this discussion, if we have assumed a 22% reduction from elimination of these embedded taxes in this $250,000 home, the actual intrinsic cost to build it and sell it at the same (after current tax) profit margin would be around $195,000. Applying the 23% FairTax to that $195,000 sales price would bring the total cost of that home to $253,247. This is approximately the same price that was paid by the buyer in the above scenario under current tax law.

The FairTax was designed to be revenue neutral, raising the same amount of taxes for the government as did the old system. As indicated in the example above, the final sales price of that new home subject to The FairTax would approximate the sales price that of the same house under the previous tax code.

Using that same 20% down and 80% financed as discussed above, the homeowner would still only need to have earnings of approximately $1200 each month to cover the payment. But the actual cost of that payment reflects a savings of over $500 each month compared to the amount of earnings needed to support the cost of buying a $250,000 new home under the current tax law, even after considering the alleged “benefit” of the Mortgage Interest Deduction.

In addition to the benefits of home ownership, the $500 monthly saving provided by the FairTax, if invested in a security that averaged a steady 6% yield over that 30 year period could grow into a tidy estate worth more than a half million dollars. Just the thing that could help out in those retirement years…and with the FairTax, such an investment could grow without any tax consequences for the homeowner, their estate or for their children and favorite charities.

Besides, when the cost to purchase a home is reduced by $500 each month, one must also consider that someone in the 28% tax bracket currently sees a paycheck in the net amount of 64.35% of the total amount of earnings. With the FairTax, all of those deductions disappear and that net paycheck suddenly goes from $643.50 for every $1000 in gross earnings, to $1000, effectively providing the taxpayer with a 55% INCREASE in take-home pay.

Another consideration is that with the FairTax, experts have estimated that the cost of financing would be reduced to the levels of municipal bond rates, which currently are not subject to taxation for the investor. With the implementation of the FairTax it would be reasonable to assume that ALL interest bearing investment securities including securitized home mortgages would enjoy the same treatment that is currently given to the tax free muni-bonds. The net reduction in interest could be between 150 and 175 basis points, or a realistic 4.5% to 4.75% home mortgage rate for the above scenario. But in this discussion the author has used current market interest estimates.

If the cost to own the above home was reduced by $500 and the total income available to make that house payment increased by 55%, it would be a reasonable assumption that the potential universe of homebuyers would also expand. And anything that expands the housing market, lowers ownership costs and increases our net take-home paycheck is something that needs to be supported by NAR instead of being shunned by it. This could be a good reason why over six dozen representatives in the current congress are co-sponsors of HR-25.

I don't support Huckabee for what he did as Arkansa Governor.
But, I support eliminating all witholding taxes that go to IRS and abolishing the IRS.
If we kept our own money it would be easy to decide what we could afford to buy and pay the 23 percent on it.
The CPA's and Tax Lawyers will work to kill this proposal but, lets take America back for all and give these people a new line of work. It would stop social engineering and tax decisons made only on paying to a huge behemoth government.
The Fair Tax was favored by Denny Hastert among others it would help everybody but lobbyists to keep a massive obtructionist program to give tax accountants and lawyers something to do.
Americans need to take back America. 08 is the year for change! Jerry White, Springfield, IL

So the best argument against the FairTax is that it'll undo the work of armies of overpaid lobbyists for narrow, yet wealthy, special interests?

That's supposed to be a negative?

And how is Frank James qualified to declare with such certaintly that "A national sales tax won't work to fund the U.S. government at current levels."

That's very debatable. The purpose of the 23% figure was to fund the federal government at exactly its current level. Whether that does it or not is debatable (or I guess it isn't anymore. Frank James has decided).

I hate to burst peoples' bubble on this, but the "Fair Tax" will not eliminate the IRS. There will need to be an enforcement/collection agency of this tax. If it's not the IRS, then it will be another gov't bureacracy.

Posted by: Terry | December 24, 2007 2:27 PM

Terry, you jackarse... we already have sales tax in all our stores for local & state governments. Where's the IRS-sized enforcement agency for that? Oh yeah.... There is none.

The reason the IRS is so unweildy is that it needs to calculate the tax liability for EVERY SINGLE AMERICAN and then enforce payment. A sales tax reduces the numbers of entities that the government would need to deal with exponentially, while making those entities much more accountable by their very nature (businesses are much easier for the government to monitor than 300 million individuals).

True, we would still need a tax enforcement agency. But it would cost us maybe 10 billion a year (my estimate) instead of hundreds of billions of $s. And that's not even including the costs borne by the private sector.

Nobody (business or individual) would need to calculate their tax liability anymore. Do you understand what that means? Do you understand how much labor is expended currently by businesses and individuals just figuring out how much we have to pay the government? Doesn't that seem like a waste to you?

Crafty B,

You moron - the taxing bodies have something callled a Department of Revenue.

I do agree that the regulatory body would shrink, but for those folks that think the IRS (or its replacement) would go away are sadly mistaken.

I also agree that yes there would be time and dollar savings in the compliance area.

I never did say it would be a bad idea, I just disagreed with those that believe the IRS would go away.

Also, I repeat, the 16th amendement better be repealed first or we will have both a sales and income tax.

Crafty B,

You moron - the taxing bodies have something callled a Department of Revenue.

Posted by: Terry | December 26, 2007 12:30 PM

Terry, you illiterate dolt. And are these Departments of Revenue anywhere near the expensive, resource wasting enterprise that the IRS is?

If you'd take the time to read, you'd see I said there is no "IRS-sized" enforcement aparatus for sales taxes. And there wouldn't need to be under FairTax. It actually wouldn't take much more than the local sales tax infrastructure we currently have. The stores would collect just as they currently are and the States would remit payment to the Federal government (so, I guess we'd need a Federal agency to enforce payment from 50 state remitters. I'm thinking the IRS could handle that with a little less expense than it currently does 300 million Americans... no?)

Reading is fundamental, Terry.

Also, I repeat, the 16th amendement better be repealed first or we will have both a sales and income tax.

Posted by: Terry | December 26, 2007 12:30 PM

"and if you wanna play basketball, you'll need a bouncy ball"

"and if you wanna write a book, you'll need to use the alphabet"

Terry, moron. The repeal of the 16th amendment is integral to the entire FairTax proposal (book and bill). think someone's already pointed that out to you. You can stop saying that now.

It's like everyone's discussing complex mathematical theorem and you keep stopping the debate with "but wait. WAIT! We haven't agreed that 2+2=4 yet."

Crafty B,

for Math lessons, I'll send you to John E.

Read the rest of my post:

"I do agree that the regulatory body would shrink, but for those folks that think the IRS (or its replacement) would go away are sadly mistaken.

I also agree that yes there would be time and dollar savings in the compliance area.

I never did say it would be a bad idea, I just disagreed with those that believe the IRS would go away."

If you would have continued reading, you would have seen we come to the same conclusion - a smaller version of the IRS will be needed.

My initial response was to "RSmith"

When the 16th Amendment was passed, the proposed tax rate was only 1% of incomes over a fairly high amount. How could anyone oppose such a modest tax on (only) the very rich?

In 1913 the income tax was 1% of amounts over 20,000, 2% of amounts over 50,000, 3% of amounts over 75,000, 4% of amounts over 100,000, 5% of amounts over 200,000, and 6 % of amounts over 500,000 --- after exempting $4,000 and any income that had already been taxed (such as corporate dividends and social security "benefits"). Thus, anyone making less than 24,000 paid no tax, and the richest citizens paid only 6%.

Today, the LOWEST tax bracket is 10%, corporate dividends and social security "benefits" are taxed (twice), and anyone making more than $8,750 (17,500 for a married couple) pays income taxes at AT LEAST the 10% rate!

Furthermore, EVERY wage earner pays 7.65 % of their wages in "social security" taxes, and their employers pay the same amount, for a total tax of 15.3% on every wage earner, and 25.3% on every penny over the "exempt" amounts!

Corporate income taxes, which are always passed on to the consumer in the form of higher prices, start at even higher levels.

AND THIS IS **AFTER** THE KENNEDY (SIC, REAGAN AND BUSH TAX CUTS, ALL OF WHICH RADICALLY REDUCED THE TAX BURDEN.

In view of this, the "FAIR TAX" would appear to be preferable. Certain basic items, and all used items, would be exempt from the new sales tax. Consumption, not savings, would be taxed, thus encouraging savings. Because of the exemptions, the poor and middle class would pay no more than they do today, and probably considerably less, especially if they saved for their futures. We could do away with, or at least reduce the powers of, the IRS, etc. etc. etc.

Even assuming all the assumptions are valid, what will prevent future politicians from increasing the sales tax rate and/or removing exempt items, and thus increasing the tax burden --- JUST AS THEY DID WITH THE INCOME TAX?

Government will always grow, and politicians will always be looking for new sources of revenue to fund new programs.

As long as the citizenry of this country expect (or accept) government regulation and "assistance" in every element of our lives, we will face oppressive taxes. It doesn't matter if they are income taxes, sales taxes, "luxury" taxes, excise taxes, import taxes, "user fees", or robbery, taxes will continue to rise as long as we allow it and demand it.

I can see it now, a new type of mafia, setting up shops and selling trinkets collecting the 23 percent tax off every dollar they sell. You'd make more money then selling drugs. Who is going to make sure these companies and small businesses send in the taxes? What about internet sales how will they be taxed?

Listen to this:

If the flat rax includes purchase of home, I will see and increase of 23% of house payment if I purchase a new home. House construction will certainly goes further down.

If all consumptions, including insurances, will be increased by 23%, my living expenses increased by 23%.

O.K. there will be no tax deduction in my paycheck, that gives me a 12% increase to spend on my pay check. But counting the 23% of living expense increases, I will be really screwed if my income is low.

O.K. I will get a rebate if my income is low. Good. But,... who will monitor my income so that they can make certain I am not cheating.

IRS is gone you know.

I think that the "fair tax" would only be fair if you charge the sales tax on everything. That includes the purchase of stocks. You are purchasing a piece of the company. People with money do not proportionally purchase more groceries, gasoline, or anything else.

If we do not tax everything, then it is not a fair tax.

Michelle