Huckabee’s Fair Tax Mistake

Bookmark and Share Mike Huckabee has released an editorial promoting the virtues of a national sales tax or as he calls it the Fair Tax.

He writes;

Hopefully by now youre somewhat familiar with how the FairTax works, but if not let me explain it briefly: You get rid of all income and payroll taxes and you get rid of corporate taxes completely. When someone tells you corporations should be taxed more – remember, if more taxes are put on a corporation – the corporation is simply going to raise the prices of their products to cover the increase – passing the increased cost to you.

That sounds good but it is also typical Mike Huckabee.deceptive.

Now I shouldnt be too hard on Huckabee. He does at least have the guts to propose true reform of a tax system that is obsolete, chaotic, oppressive, and a hindrance to economic growth. We need a presidential candidate and President who will not simply tinker with a broken system but prepared to support a cash for clunkers like approach to our tax code by junking it and replacing it with a system that does not penalize success, oppress entrepreneurial innovation, and hold back our economy.

Huckabee is correct when he writes refers to tax reform in his editorial by writing , I do know we wont have a chance if we dont have the courage and leadership in Congress to see the task through. That is most certainly true. But that leadership must come from more than just Congress. Sweeping change must be supported by our Commander-in-Chief, the person who has the power of the bully pulpit behind them and who believes in the reforms that he or she convinces the nation of the need for.

But the Fair Tax is not the reform that this nation needs. First of all, the Fair Tax is anything but fair. If George Soros decides to have his help purchase televisions for all the bathrooms in all of his estates, he can afford the additional cost that a national sales tax places on his purchases. But for an average family that lives from pay check to pay check, the new national sales tax simply makes it harder for them to replace the one TV screen that they have had for 10 years and is displaying a screen with a picture that is shrinking.

For a family making $200,000 a year, a rise in the cost of all products may be affordable but for too many higher prices simply puts more products further out of the reach and places a significant burden on them.

Higher prices are not what I believe the Republican candidate for President or Congress should be proposing.

Instead I believe it is incumbent upon our Party and its candidates to demand that we abolish our current arcane tax code and replace it with a Flat Tax. Unlike the so-called Fair Tax, a Flat Tax is exactly what it says..flat. It is one rate for one nation. There is no discrimination, there is no hike in the costs of products and there is no penalizing of success. Instead, a Flat Tax offers tax relief, puts an end to loopholes, and grows our economy.

Of the last ten years, the fastest growing economies of the world have adopted a flat tax for their nations. The greatest examples of this exist in the former Soviet states of the Balkans. When they adopted a flat tax, they saw their economies boom and have maintained steady economic development and growth. Yet, the United States, still hangs on to our antiquated tax system, a system that only grows our economy whenever we tinker with it to reduce rates. And when we reduce rates, which area of debate is the greatest source of disagreement? Why it is who those reductions should go to. And from there inevitable comes the debate on what constitutes defining one as rich.

The Flat Tax puts an end to all those debates. With a Flat Tax rate of say, 14%, the wealthy still pay a greater percentage than do the less wealthy. 14% of 40 million comes out to be much more than does 14% of 40 thousand. And unlike Mike Huckabees national sales tax, it does unduly burden families with higher costs. In fact for many, it lowers the amount of money that the government currently takes from them.

Huckabee understands that we need real change in America. That is a good thing, but what he does not realize is that the change he proposes does more harm than good and if he really wants to promote tax fairness, then the Flat Tax, one rate for one nation is the way to go.

Government does not produce wealth and it is not naturally sustainable. The people and the entrepreneurial spirit of America through its free markets, are what creates wealth and sustains our government. That is why I believe we must eliminate our current oppressive tax code, a tax code that rewards failure must go. We need leadership that will implement what I call a National Economic Recovery and Responsibility plan that will help spark our economy, reduce spending and put America back on the road to a steady, growing, stable economy. As such I offer my own detailed tax reform plan for Governor Huckabee to consider in place of his national sales tax.

I.-The National Tax Equity Act

(For a detailed explanation click on thebill titlelink above)

1. A flat tax rate on individuals and businesses shall be adopted as outlined below with a rate of 18% that, after three years, will level off at 15.5% of whats left of the total annual income from all wages, salaries, and pensions after subtracting a personal allowance.

Those four allowances would be:

  • – $26,600 for married filling jointly
  • – $16,850 for single head of household
  • – $13,650 for single
  • – $5,300 for each dependent child
1.A Individual gross earnings up to 2 times the established poverty level (based upon the year preceding) are exempt from taxation. All income above that level shall be taxed at the specified rate.

1.B Businesses and Corporations with gross earnings up to the value resulting from multiplying the number of legal US resident employees in the business against 2 times the established poverty level (based on the year preceding) shall be exempt from taxation with all gross income above that level taxed at the specified rate.

1.C– All corporations will be taxed by the same single national tax rate and they will take their total income, subtract total expenses and if the result is a positive amount (profit), they will pay tax on that amount at a the national tax rate.

2.A – All Businesses and Corporations thatexceed federalenergy efficiency and environmental standardswill be entitled to an annual dedcution of10%the amount oftheir annual profit.

2.B-All individual home amd property owners thatexceed federalenergy efficiency and environmental standardswill be entitled to an annual dedcution of10%the amount oftheir annual profit.

3.A -There shall be an exemption up to but not to exceed the greater of 10% of gross annual income or 25% of the annual median income, applied to College Savings Accounts, Individual Retirement Accounts (IRA), Money Market Accounts and Certificates of Deposits.

3.B– Allow for the automatic deposit of tax refunds that are based onthe rate of savings formula implemented upon passage of thefederally insuredPrivatizedFuture Security Annuity Accountsprogram that will take the place of SSI.(see proposed PFSA program here)

3.C-Provide employment-based health insurance to individuals with annuals earnings under $55,000, in the form of refundable, advanceable tax credits. Families would get up to $5,700 a year and individuals up$2,300 to buy insurance and invest in Health Savings Accounts

4. Social Security benefits are exempt from taxation.

5. A complete 100% exemption from the flat tax for spouses of military personnel deployed in a theatre of battle to be effective from the time of deployment to the end of the calendar year after deployment ends.

6– The following will hereby require a 2/3 majority for passage and adoption:

-Raising or reducing the flat tax rate

  • -Extending or eliminating tax credits
  • -Increasing or decreasing the rate of a penalty tax
  • -Creating any new penalty taxes
  • -Borrowing money to pay for general expenses
7. Direct income from inheritance settlements are exempt from taxation.

8. Specific provisions for implementation to be determined by a Congressional review committee with input from regulators, industry representatives and budget experts

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15 Responses

  1. Has this been researched to determine the net revenue received under this plan compared to the net revenue received under the income tax. The developers of the fair tax spent over 20million in research funds to determine what rate was necessary to have the fair tax be revenue neutral.The income tax that we have started out as a flat tax in 1913 and look at it now. The flat tax does not tax accumulated wealth.The fairtax does.

    • Yup. It has been researched. Look up the flat tax at the Heritage Foundation website. And you might want to research the so-called fair tax because it does not tax accumulated wealth.

  2. // “or as he calls it the Fair Tax.” // And that is where I stopped reading, because that statement you made tells me (and every other FairTaxer) that you know ABSOLUTELY NOTHING about the FairTax. Period.

    Your blog post is worthless and means nothing to anyone who knows even the slightest bit about the FairTax. If you want to LEARN about the FairTax, then I suggest you take the time to actually do so and stop listening to the moronic drivel from people like Bartlett and Vance.

    • Your rebuttal is worthless and means nothing to anyone who knows even the slightest bit about what the national sales tax does. If you want learn about the National Sales tax, then I suggest you take the time to actually do so and stop listening to the moronic drivel from people like Huckabee and Cain regarding how beneficial a national sales tax would be when in fact, it is does more harm than good.

      You see, it is easy to apply the same ignorant, obnoxious, and feckless standard to your own asinine rebuttal, that you do my arguments. So next time you have something say, I suggest that you make it meaningful, although after reading your feebl;e attempt to promote a national sales tax, I will not be wasting my time with anything you write

      • Yes, but I can spell and I don’t sound like an tool by mimicking other people. If you’re going to attempt to demagog something that has over $25 MILLION in research behind it, you’d better learn to do some fact checking.

        First, my initial stopping point; your lame comment “or as he calls it the Fair Tax”. Huck calls it that for the same reason millions of others call it that, because it is its name. Do you say things like “or as Ford calls it, a car” ? Or “or as Dell calls it, a computer”? No, you call them cars and computers because that is what they are. Plain and Simple. If you haven’t figured that out by now, then you have no reason even writing about the FairTax.

        Second, your entire blog (not just this post) is rife with bad spelling, poor grammar, and incorrect assumptions. You’d think that if you were truly concerned about being a POTUS Candidate that you would at least show that you have some education and that you cared. Here’s a wake up call for you! You’re not POTUS material.

        Third, I will address ONE MORE of your ridiculous points, see if you can keep up with me:

        You Said: “If George Soros decides to have his help purchase televisions for all the bathrooms in all of his estates, he can afford the additional cost that a national sales tax places on his purchases. But for an average family that lives from pay check to pay check, the new national sales tax simply makes it harder for them to replace the one TV screen that they have had for 10 years and is displaying a screen with a picture that is shrinking.”

        The FairTax, if you would take time to understand it, completely untaxes the poor. It also gives them their entire (federal) paycheck. If a poor person earns $12,000 in the year, under the FairTax, that poor person takes home $12,000. Unlike our current system where they take home only a small portion of that AFTER they have been raped by the federal government.

        George Soros, on the other hand, DOESN’T COLLECT A PAYCHECK and is therefor exempt from taxes under our current tax system. The only taxes that man pays are the state and local sales taxes when he purchases something. THAT is what the FairTax is about…taxing you when you SPEND your money, not BEFORE you can spend it.

        Is it really that difficult a concept for you to understand???

  3. Just a few things in your not so thoroughly researched atricle.
    Your flat tax leaves the income tax in place
    Your flat tax leaves the payroll tax in place, regressive for the lower income
    You flat tax has a bunch of exceptions and or deductions(I counted 8), the politicians will like that

  4. You know nothing about the FairTax.

    Your proposal is ripe for lobbyists and politicians to mangle until it looks exactly like our tax code now. You talk about not wanting to penalize success, and then you proceed to propose an income tax. Taxing income punishes production. Always has and always will. Even if you call it something like Tax Equity.

    Lowering the cost of production by removing corporate taxes (and the match on payroll taxes) and forcing companies to compete directly rather than to see whose lobbyists can manipulate the tax code the best will lower prices. Factor in the FairTax, and prices will be close to what they are now.

    This isn’t going to be some massive cost of living increase. But just to make sure, there is a provision to rebate the taxes a household would pay on monthly poverty level spending. By removing the income withholdings (including FICA – the most regressive tax in the nation) and providing this rebate, the poor are completely untaxed. Meanwhile, everyone who obtains income off the books (including criminals) and therefore pays no income taxes today will instantly be transformed into a tax payer. Thus broadening the tax base and lowering everyone’s overall tax burden.

    Next time, do some research (HR 25 is only 136 pages) before being so quick to dismiss and promote your own convaluted scheme.

    • Excuse you but I believe yo need to do research of your own! Clearly your opinion is just that, your opinion, and it is quite clear to me that your opinion is an uneductaed one. I reach my conclusions on research. My own research. Not the research of paid propaganists, who a hired to distirt facts and twist statistsics with data designed specifically to prmote one view. It is also quite obvious to me that you need to get some basic education in math before you evcen atempt to do any real research because you did know your math, you would realize that as I said, the so-clalled Fait Tax is anything but fair.

      Now go back under the rock you crawled out from under and next time you wish to challenge someone elses knowlege on an issue, I suggest that you be prepared to arm yourself with the facts to support your contention. In closing…..”kiss my ass” and shove the national sales tax up your own ass.

  5. Uh, the Fair Tax DOES tax accumulated wealth.

    Say I win the lottery and take the cash option.
    Under the Fair Tax, I pay no federal taxes on my winnings, but everytime I make a purchase, I am assessed the Fair Tax (actually, it will be include in the price). And because I receive the prebate, my effective tax rate will only APPROACH 23% (but never reach it).
    I would never work another day in my life, but because I would be spending my ACCUMULATED wealth, I will always be paying the Fair Tax.
    And when embedded taxes are removed from the wholesale price, my retail price (with the Fair Tax) will be about what it is now.

  6. I admire you, Mr Kempite, for your ambitious candidacy and for proposing an alternative tax system. That sets you apart from most people. Like you, I make my decisions based on my own research and logical conclusions. I’ve found that I am capable of checking the math of others as well as ciphering through a mass of figures and arriving at a correct answer.

    Allow me, if you will, to ask how you would address the “tax gap” with your proposal. In other words, how will your system collect taxes from the 11 million+ illegals in this country? And how about the 1 million+ legitimate businesses that just don’t file returns? I would suppose that you would retain the IRS for enforcement purposes?

    And another question, please: in the beginning, you propose an 18% rate which, when added to the 7.65% that each person pays for Social Security and Medicare, would total over 25% of a person’s income for the first 3 years, and 23% after that. What criteria did you use to determine the 2.5% reduction after 3 years? Thanks in advance for your answers.

    • To be clear, I am not, will not, and have never been a candidate for President. The links you may have gotten that impression from were related to a now defunct website called U4Prez.com in which people ran a virtual candidacy for President. As a political consultant, Party leader, and legislative cheif of staff, I am expereinced enough to know that I am not capable of playing politics well enough to ever actually run for the presidency of the United States, nor do I have such a desire. Not only am I probably not worthy, I know that I do not have skin thick enough to withstand the attacks and judgements that comes with such a responsibility. I am one of those who realizes that I am not generous enough to actually put my name on the ballot and endure all that comes with a process that actaully involves more giving of ones self than most voters realize. However, I am quite comforatble assisting those whom I believe in and who are brave enough, and generous enough to make the sacrifices that public office requires.

      Thats stated, in what was a website game, I introduced a very real proposal which I believe forms the sound foundation for the development of actual legislation. A foundation which I formed long before U4Prez, the website which I included my proposal in.

      As for your questions, my proposal is not designed to address the issue of illegal immigration. For that I have a different proposal called Open Arms-Secure Borders. I do not find any legitimacy in the national sales taxers claims that their new form of taxation takes care of the problem of collecting taxes form illegal immigrants. We are talking about two different problems here. One is a problem with the current arcane tax code. The other is the problem of illegal immigration. The argument that a natrional sales tax forces illegal immigrants to pay taxes, may sound appealing but the truth is that I do not wish to gloss over the major issue there. And the keyword to that issue is “illegal”. My goal is not to make sure that illegal immigrants are legally taxed. My goal is to see that illegal immigrants are properly prosecuted under our laws and that wse have laws and an enforcement process which leads to less illegal immigration.

      The attempt by flat taxers to win approval for their flawed opinion by using the illegal immigrant argument is nothing more than politics-as-usual. It is an attempt to cloud the issues and find strawman arguments. In this case it clouds two issue…..taxes and illegal immigration. One has nothing to do with the other. If I want to fix my car, I do not call a drywall contractor. So I do not seek to address illegal immigration with tax solutions.

      And yes I do unfortunately maintain the IRS. I see no other way to effectively collect taxes but whether national sales taxers realize it or not, a form of the IRS, albeit under a different name will still have to exist in regards to any new form of taxation. National sales taxers may wish to deny that, but that is typical of their cause.

      But just as would be the case with the scaled down federal taxing authority that would exist under a national sales tax, my simplified tax proposal also allows for a scaled backed version of the IRS. With the elimination of loopholes and regulations and twisted interpretations of thousands of pages of tax laws. Insofar as the legitimate businesses that you believe do not believe pay any taxes, I can assure that under a flat tax which eliminates loopholes, such a problem would no longer exist. The simplicity of the process makes such a blatant disregard for the law practicaly if not totally impossible.

      As to your last question, you have to excuse but I don’t understand the thinking behind it. As explained in the proposal that I believe you saw, I reform the programs you speak of and laid out one such program here: http://kempite4prez.wordpress.com/reforming-government-the-way-it-works-how-much-it-costs/v-%e2%80%93-beginning-in-2012-transform-social-security-into-a-private-system-that-encourages-personal-savings-through-tax-incentives/

      Is my paln the be all to end all. No it isn’t and I do not pretend that it is. However it is quite realistic, quite effective. If I had unfettered access the CBO and the other raw data that the federal government does noit already make readily available to the public, I am sure I would find several altedrations that I might make, but ultimately I do believe my personal proposal is quite sound and effective. Others will disagree just as I will disagree with them, unless of course they prove to me that a national sales tax would not be as damaging as the facts reveal it would be to me.

      • Well, my last question was – What criteria did you use to determine the 2.5% reduction after 3 years? – referring to the 18% rate to start and the 15.5% rate after 3 years. Sorry if I confused the issue by adding in the FICA rate, which would have to be done to determine an actual effective total tax rate until FICA rules are changed

        • The reason for the decduction over three years is because while it is difficult for me to determine the actual gap in revenues that the federal government may initially by switching from the old tax code to a new one, I do know that for the first year or two, there will be an immediate reduction in tax revenue. However within two years, from adopting a flat tax, its overall benefits which actually expand the economy, will eventually be responisble for a flat tax to produce greater tax revenue. So I lower the tax rate accordingly. i merely to choose to start it at higher rate due to what will undoubtedbly be an initial transition that will come with some growing pains for the federal government.

          The government will be forced to cutting it’s budget and it size and that will take time. Hopefully not an eternity though. Starting at higher rate than what we settle on within three years, merely helps us through the tranistion of such a tax reform .

  7. I hate to tell you Kempite, but a flat tax will be subject to, in future legislatures, the same addition of loopholes and exemptions that plague our current code.
    In 1913, it WAS a flat tax, and you see what we have?
    The Fair TAX MAKES CHANGES POSSIBLE, BUT VERY DANGEROUS POLITICALLY.
    nO POLITICIAN WOULD WANT TO GO ONRECORD TO CHANGE THE one rate THAT THE Fair tax has,
    (sorry about the caps lock)

    • Such might be the case if a supermajority were not required as in the proposal I support. The bottom-line is that I hate to tell you that under such a requirement, the same exact :change is possible but very dangerous politically” theory that you have regarding a national sales tax, would aplly to the flat tax.

      Ultimately, I just do not want to introduce another means by which the federal government is the authority to tax the people. Instead of introducing a national sales and eventually risking the chance that the left will try to maintain an unfair tax code that penalizes success and also introduce a national sales tax too. I have made clear my reasons for supporting one rate for one nation and in the end, I believe that is what is truly fair. It is also proven have to have been the one form of taxation that has been responsible for the fastest growing economies in the world. Problem is you wish not to believe my facts and I do not agree with your interpretation of the facts (vise versa in your case). So like Congress, we gridlocked. If it were up to us, I am not sure how a compromise could be reached on the issue, Fortunately though, I believe compromise won’t be necessary because more people will elect proponents of a flat tax than would proponents of a national sales tax. So if we are lucky, there will eventually a majority in Congress that can finally adopt a flat tax.

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