The main reason I voted for Governor Huckabee in the Republican Primaries in 2008 was his proposal to replace the Income Tax completely with a National Sales Tax.
Huckabee’s Tax Plan Is Brilliant
So why is it getting trashed?
By Steven E. LandsburgPosted Thursday, Jan. 10, 2008, at 12:05 PM ET
A major step in restoring the economy is moving to a tax system that eliminates the distortions to the markets the current system creates with its various loop holes and deductions which this plan will do.
If he runs for the Republican nomination in 2012 with this as a core part of his campaign I will very likely support him again.
Here is a better link to the plan Governor Huckabee proposed.
Huckabee Pushes National Sales Tax in NH
Dec 14 02:03 PM US/Eastern
By LIBBY QUAID
Associated Press Writer
[[[The tax plan Huckabee has proposed, called the “FAIR tax,” would eliminate federal income and investment taxes and replace them with a 23 percent federal sales tax. The poor would pay no net sales tax up to the poverty level, and every household would receive a rebate equal to sales taxes paid on essential goods and services.]]]
Thanks Carl, by far the best article I’ve read today! …and somewhat entertaining as well! “Immortal stupidity” is a great turn of phrase for the crap our legislatures turn out.
The Fair Tax pre-exists Huckabee’s presidential run. It wasn’t born from his mind at all. As much as I want the Fair Tax, I can’t bring myself to vote for Huckabee in a primary. He comes with too much authoritatian baggage.
Ditto what Steve said on the Williamson article, thanks Carl, good stuff.
And while I agree with the sentiment of Rand’s post, the recommendations in the article he linked to makes me cringe.
I hadn’t quite finished that Williamson article yet when I first posted. Fantastic.
It’s like a pop version of one of Ayn Rand’s Essays in Capitalism the Unknown Ideal, in which she wrote about the railroad ‘Robber Barons’ Mr. Williamson mentioned, and how they were forced by government to get in bed with legislators for the same reasons that Mr. Williamson mentions in his article.
What he mentions, is that the influence of regulators changes the field of competition from one in which customers and businesses profit from successful competition, to one in which only legislators, their staffers, and the businesses profit. The customers lose (or no longer gain). Which is what you should logically expect when the customers have less influence on business profitability.
Competition in the regulatory realm is also much easier than competition in the marketplace, and creates a trend toward monopolization – there are far less masters for a business to please, and businesses that are more established have an easier time pleasing those masters. Keeping the innumerable individuals of the market happy is far harder than keeping a relative handful of legislators happy.
I do like the sales tax/fair tax, particularly over the current social experiment that is our current tax law. However, if the concern is about manipulation of markets (and well it should be), then a sales tax may actually make it easier for politicians. Indeed, it’s been obviously very easy for state and local politicians to abuse taxpayers under the guise of a “sin tax” on things like alcohol and tobacco. I suspect “sin tax” for SUV’s, and tax savings on home purchases.
I’m not against the idea, just noting that whatever gets passed will need to consider these delimmas.
While replacing the current convoluted and corrupt income tax with a national retail sales tax would be a dramatic improvement, there is a danger here. Unless you accompany the change with a repeal of the 16th amendment, you run the very real risk that you’d end up with both the sales tax and an income tax. Oh, they’d revive the income tax to address some real or imagined emergency and swear that it’d be both temporary and only on the rich, but history proves the lie to both of those assertions. As for the likelihood of repealing the 16th amendment, I just don’t see any realistic scenario of how that would ever be politically possible.
Carl, when I read that link I do it in your voice (and I have no idea what your voice actually sounds like.)
In the other article (with Carl’s a filter)…
…Congress could commit acts of fiscal responsibility, especially raising revenues, that their constituents otherwise might not stand for.
Which makes me not trust this guy. I don’t think these words mean the same to him as they do to me. I agree with Ryan.
One problem with the fair tax, although generally I like it, is it means revoking an amendment, which I’m also for, but I just do not trust them to get it right.
That is both one of the coolest and most difficult things about the Fair Tax. It does incorporate a 16th Amendment repeal, so the Fair Tax isn’t as easy to pass as other laws.
But without repealing the 16th Amendment, we can never attain a moral tax system. Anything we get with the 16th Amendment in place is going to stifle innovation and ignore our rights to the fruits of our labor.
Leland,
The key to preventing that would be in the wording of the amendment it would take to implement it. Exemptions, if any, to it should be clearly spelled out within the amendment thereby creating a higher barrier to changing them.
The only decision Congress should have would be to set the rate necessary to balance the budget. And since it would apply to 100% of the population you could bet the pressure against raising it would be major. That is one of the problems with the Income Tax. Half of American don’t pay it and the pain to many of the rest is reduced because of withholding (thank you Dr. Friedman…) defuses the pain until they file their return. By contrast if taxpayers feel the pain every time they buy a cup of coffee or go shopping they will have a stronger incentive to push for its reduction.
Ryan O.
Yes, that is one of the benefits of it 🙂
Ryan O,
Yes it did, but he was the one to pick it up and promote. But it would be nice if it became part of the Republican Party Platform…
ken, here is what I sound like. And here is what my poor deluded opponents sound like.
I’m in favor of a constitutional amendment that would limit the tax code to 20,000 words. It’s a 100 years of barnacles on the ship of state. We need to scrape off the crap and limit future buildup. Politiicians love the income tax. It allows them to tweek here and there for their friends. Limit the box’s size. If they want to change something, then they’ll have to take something else out.
LOL Well I’ll keep that in mind, pilgrim.
When I first started working, Rod, at age 16, the State of Pennsylvania had what amounted to a three-line tax form:
Line 1: your income
Line 2: 2.2%
Line 3: multiply Line 1 by Line 2, and send us a check for the result.
I vaguely recall writing them a check for about $20 the first year I worked, and they quite soberly cashed it. There were no deductions, no filing classes, no exceptions, nothing. 2.2 cents on every dollar you earned, full stop.
I’m in favor of a constitutional amendment that would limit the tax code to 20,000 words.
First, the Constitution is about 4400 words long. Why should the tax code be almost 5 times as large. Given the difficulty in repealing the 16th amendment and the danger of enacting a sales tax without the repeal, I’m more in favor of a flat tax along the lines of what Carl describes. Tax forms wouldn’t have to be any larger than a post card and Americans wouldn’t spend over 6 billion hours (the equivalent of the full time labor of over 3 million people) complying with the law. Not only is the current code overly complex and corrupt (giving countless favors to special interests), the compliance cost makes it horribly inefficient.
“…without apportionment among the several States…”
The 16th doesn’t just establish an income tax. Along with the 17th, it’s a huge power shift to a centralization government.
How did we get into such a mess where the states collect revenue to send to the fed and they use it for political payoffs and arm twisting?
#2. Do not wander by CP’s homestead should you smell alcohol and/or potassium nitrate. Just don’t.
Thanks for the link, Titus. It backs up what I’ve long said: the federal income tax is only one of a long list of taxes and fees we pay. Here are the ones I pay that immediately come to mind. No doubt I’ve forgetting some of them.
1. Federal income tax
2. Social Security tax
3. Medicare tax
4. Colorado income tax
5. Sales tax (~8%)
6. Property tax
7. Gasoline tax (auto and aviation)
8. Vehicle use tax
9. Taxes on each item of our utility bill (electricity, gas, water and sewage)
10. Taxes on our cell phone (~15% of the bill)
11. Taxes on our home phone and other communications services
And that doesn’t include the long list of “fees” that local and state officials use to get around Colorado’s tax limitation laws.
Nor does it include the hidden taxes and regulatory compliance costs that are buried in the price of everything we buy. Is anyone so naive as to believe corporations actually pay the taxes themselves instead of just passing them on in the cost of their products and services?
Several years ago, I added up all of the taxes my wife and I pay each year that we could identify. It came to about $60,000. How is it that I’m called greedy for wanting to keep more of our income but those demanding tax increases to get more free goodies aren’t considered greedy for wanting to take other people’s hard earned money?
Instead of Huckabee, who I suspect is not as conservative as he leads us to believe, what about Herman Cain, who’s also promoting the Fair Tax? His hat’s in the ring and he’s got a business record as good as Mitt Romney’s: VP of Pillsbury, Burger King rescuer, CEO of Godfathers Pizza, CEO of the National Restaurant Association, and Chairman of the Board of the Federal Reserve Bank in Kansas City.
He’s a very pragmatic, down-to-earth figure, and I think he might be capable of appealing to a broader section of working people than The One.
And before you rewrite it, read this.
The main reason I voted for Governor Huckabee in the Republican Primaries in 2008 was his proposal to replace the Income Tax completely with a National Sales Tax.
http://www.slate.com/id/2181833/
Huckabee’s Tax Plan Is Brilliant
So why is it getting trashed?
By Steven E. LandsburgPosted Thursday, Jan. 10, 2008, at 12:05 PM ET
A major step in restoring the economy is moving to a tax system that eliminates the distortions to the markets the current system creates with its various loop holes and deductions which this plan will do.
If he runs for the Republican nomination in 2012 with this as a core part of his campaign I will very likely support him again.
Here is a better link to the plan Governor Huckabee proposed.
http://www.breitbart.com/article.php?id=D8THD8A80&show_article=1
Huckabee Pushes National Sales Tax in NH
Dec 14 02:03 PM US/Eastern
By LIBBY QUAID
Associated Press Writer
[[[The tax plan Huckabee has proposed, called the “FAIR tax,” would eliminate federal income and investment taxes and replace them with a 23 percent federal sales tax. The poor would pay no net sales tax up to the poverty level, and every household would receive a rebate equal to sales taxes paid on essential goods and services.]]]
Thanks Carl, by far the best article I’ve read today! …and somewhat entertaining as well! “Immortal stupidity” is a great turn of phrase for the crap our legislatures turn out.
The Fair Tax pre-exists Huckabee’s presidential run. It wasn’t born from his mind at all. As much as I want the Fair Tax, I can’t bring myself to vote for Huckabee in a primary. He comes with too much authoritatian baggage.
Ditto what Steve said on the Williamson article, thanks Carl, good stuff.
And while I agree with the sentiment of Rand’s post, the recommendations in the article he linked to makes me cringe.
I hadn’t quite finished that Williamson article yet when I first posted. Fantastic.
It’s like a pop version of one of Ayn Rand’s Essays in Capitalism the Unknown Ideal, in which she wrote about the railroad ‘Robber Barons’ Mr. Williamson mentioned, and how they were forced by government to get in bed with legislators for the same reasons that Mr. Williamson mentions in his article.
What he mentions, is that the influence of regulators changes the field of competition from one in which customers and businesses profit from successful competition, to one in which only legislators, their staffers, and the businesses profit. The customers lose (or no longer gain). Which is what you should logically expect when the customers have less influence on business profitability.
Competition in the regulatory realm is also much easier than competition in the marketplace, and creates a trend toward monopolization – there are far less masters for a business to please, and businesses that are more established have an easier time pleasing those masters. Keeping the innumerable individuals of the market happy is far harder than keeping a relative handful of legislators happy.
I do like the sales tax/fair tax, particularly over the current social experiment that is our current tax law. However, if the concern is about manipulation of markets (and well it should be), then a sales tax may actually make it easier for politicians. Indeed, it’s been obviously very easy for state and local politicians to abuse taxpayers under the guise of a “sin tax” on things like alcohol and tobacco. I suspect “sin tax” for SUV’s, and tax savings on home purchases.
I’m not against the idea, just noting that whatever gets passed will need to consider these delimmas.
While replacing the current convoluted and corrupt income tax with a national retail sales tax would be a dramatic improvement, there is a danger here. Unless you accompany the change with a repeal of the 16th amendment, you run the very real risk that you’d end up with both the sales tax and an income tax. Oh, they’d revive the income tax to address some real or imagined emergency and swear that it’d be both temporary and only on the rich, but history proves the lie to both of those assertions. As for the likelihood of repealing the 16th amendment, I just don’t see any realistic scenario of how that would ever be politically possible.
Carl, when I read that link I do it in your voice (and I have no idea what your voice actually sounds like.)
In the other article (with Carl’s a filter)…
…Congress could commit acts of fiscal responsibility, especially raising revenues, that their constituents otherwise might not stand for.
Which makes me not trust this guy. I don’t think these words mean the same to him as they do to me. I agree with Ryan.
One problem with the fair tax, although generally I like it, is it means revoking an amendment, which I’m also for, but I just do not trust them to get it right.
That is both one of the coolest and most difficult things about the Fair Tax. It does incorporate a 16th Amendment repeal, so the Fair Tax isn’t as easy to pass as other laws.
But without repealing the 16th Amendment, we can never attain a moral tax system. Anything we get with the 16th Amendment in place is going to stifle innovation and ignore our rights to the fruits of our labor.
Leland,
The key to preventing that would be in the wording of the amendment it would take to implement it. Exemptions, if any, to it should be clearly spelled out within the amendment thereby creating a higher barrier to changing them.
The only decision Congress should have would be to set the rate necessary to balance the budget. And since it would apply to 100% of the population you could bet the pressure against raising it would be major. That is one of the problems with the Income Tax. Half of American don’t pay it and the pain to many of the rest is reduced because of withholding (thank you Dr. Friedman…) defuses the pain until they file their return. By contrast if taxpayers feel the pain every time they buy a cup of coffee or go shopping they will have a stronger incentive to push for its reduction.
Ryan O.
Yes, that is one of the benefits of it 🙂
Ryan O,
Yes it did, but he was the one to pick it up and promote. But it would be nice if it became part of the Republican Party Platform…
ken, here is what I sound like. And here is what my poor deluded opponents sound like.
I’m in favor of a constitutional amendment that would limit the tax code to 20,000 words. It’s a 100 years of barnacles on the ship of state. We need to scrape off the crap and limit future buildup. Politiicians love the income tax. It allows them to tweek here and there for their friends. Limit the box’s size. If they want to change something, then they’ll have to take something else out.
LOL Well I’ll keep that in mind, pilgrim.
When I first started working, Rod, at age 16, the State of Pennsylvania had what amounted to a three-line tax form:
Line 1: your income
Line 2: 2.2%
Line 3: multiply Line 1 by Line 2, and send us a check for the result.
I vaguely recall writing them a check for about $20 the first year I worked, and they quite soberly cashed it. There were no deductions, no filing classes, no exceptions, nothing. 2.2 cents on every dollar you earned, full stop.
I’m in favor of a constitutional amendment that would limit the tax code to 20,000 words.
First, the Constitution is about 4400 words long. Why should the tax code be almost 5 times as large. Given the difficulty in repealing the 16th amendment and the danger of enacting a sales tax without the repeal, I’m more in favor of a flat tax along the lines of what Carl describes. Tax forms wouldn’t have to be any larger than a post card and Americans wouldn’t spend over 6 billion hours (the equivalent of the full time labor of over 3 million people) complying with the law. Not only is the current code overly complex and corrupt (giving countless favors to special interests), the compliance cost makes it horribly inefficient.
“…without apportionment among the several States…”
The 16th doesn’t just establish an income tax. Along with the 17th, it’s a huge power shift to a centralization government.
How did we get into such a mess where the states collect revenue to send to the fed and they use it for political payoffs and arm twisting?
Couple points:
#1. Bear this in mind.
#2. Do not wander by CP’s homestead should you smell alcohol and/or potassium nitrate. Just don’t.
Thanks for the link, Titus. It backs up what I’ve long said: the federal income tax is only one of a long list of taxes and fees we pay. Here are the ones I pay that immediately come to mind. No doubt I’ve forgetting some of them.
1. Federal income tax
2. Social Security tax
3. Medicare tax
4. Colorado income tax
5. Sales tax (~8%)
6. Property tax
7. Gasoline tax (auto and aviation)
8. Vehicle use tax
9. Taxes on each item of our utility bill (electricity, gas, water and sewage)
10. Taxes on our cell phone (~15% of the bill)
11. Taxes on our home phone and other communications services
And that doesn’t include the long list of “fees” that local and state officials use to get around Colorado’s tax limitation laws.
Nor does it include the hidden taxes and regulatory compliance costs that are buried in the price of everything we buy. Is anyone so naive as to believe corporations actually pay the taxes themselves instead of just passing them on in the cost of their products and services?
Several years ago, I added up all of the taxes my wife and I pay each year that we could identify. It came to about $60,000. How is it that I’m called greedy for wanting to keep more of our income but those demanding tax increases to get more free goodies aren’t considered greedy for wanting to take other people’s hard earned money?
Instead of Huckabee, who I suspect is not as conservative as he leads us to believe, what about Herman Cain, who’s also promoting the Fair Tax? His hat’s in the ring and he’s got a business record as good as Mitt Romney’s: VP of Pillsbury, Burger King rescuer, CEO of Godfathers Pizza, CEO of the National Restaurant Association, and Chairman of the Board of the Federal Reserve Bank in Kansas City.
He’s a very pragmatic, down-to-earth figure, and I think he might be capable of appealing to a broader section of working people than The One.