Rich Lowry on Mike Huckabee’s “Sales Tax Lunacy”
December 4th, 2007 by Brendan SteinhauserColumnist Rich Lowry has written a tough critique of Mike Huckabee and the so-called “fair tax.” First, Lowry goes after Huckabee’s record in Arkansas,
An editorial in the newspaper The (Arkansas) Leader recounting Huckabee’s tax increases reads like a roll call of most of economic life. He repeatedly increased or expanded the sales tax; hiked the corporate-income tax; imposed an income-tax surcharge on individuals and domestic and foreign corporations; raised the tax on gasoline and diesel fuel; taxed admission to theme parks and other tourist activities; taxed snuff, cigarettes, mixed drinks, private clubs and retail sales of beer; and so on.
Ouch. After pointing out the numerous taxes Huckabee supported as governor, Lowry goes on to point out that the candidate supports the “fair tax” because of his terrible record on taxes. The “fair tax” would serve to give him cover as a candidate running in the GOP primary. Lowry doesn’t buy it.
To avoid the risk of getting both a national sales tax and an income tax, FairTaxers would have to repeal the 16th Amendment. Good luck: Huckabee’s magic wand will come in handy.
Lowry concludes his piece by pointing out that “the congressional Joint Committee on Taxation has estimated that the rate would have to go as high as 57 percent. ” Furthermore, he writes, the “fair tax” would be incredibly regressive, with home buyers paying 30% in taxes on home purchases! Lowry writes that this is why “no serious candidate would ever endorse [the fair tax.]”
Fiscal conservatives can all agree that the current tax code is a nightmare. We can all agree that we need to scrap the code and replace it with something better. But as Lowry and others have pointed out, unless you can repeal the 16th amendment first, we just might get stuck with both a sales tax and an income tax. This wouldn’t be good for anyone.
For a better, more workable alternative with proven results, visit FreedomWorks’ web page on the flat tax.
December 4th, 2007 at 5:36 pm
“57%”? Rich is just throwing out statistics that are completely fabricate or derived from other consumption tax proposals. The Fair Tax has Supply Side economics in mind when it calls for a 23% tax, it takes into account the offshore monies, and the underground economy. Also, th Flat Tax is proven to be regressive while th Fair Tax is progressive. Even though the rate is 23%, it is actually variable considering the prebate. Take that into account, it really is zero for the poor, about half for the middle class, and right around 23% for the wealthy to very rich.
I am sure that Rich is a great guy, but he is trying to skewer the only guy talking real change from the status quo in favor of a proposal that is getting no consideration.
December 4th, 2007 at 5:41 pm
The flat taxed has passed in Russian, Estonia, Mongolia, Iceland and Slovakia. Why can’t the US pass it as well?
Do you honestly believe that we could repeal the 16th amendment to the constitution?
Thanks for the comment chukmaty.
December 4th, 2007 at 7:32 pm
Huckabee is trying to lie and cover up his BAD, liberal record on taxes. Therefore, every person and PAC needs to oppose Huckabee at all costs.
January 10th, 2008 at 11:26 am
President Huckabee has a proven track record of working with Democrats…Arkansas state government was 80% Democrats! If anybody can repeal the 16th amendment it’s President Huckabee, and constitutional scholars have said that an executive order shutting down the IRS and forcing the Congress to repeal the 16th amendment and while coming up with a replacement tax system, is “a completely viable option”… So Rich Lowry better study some more before simply relying on a completely biased group like the Joint Committee on Taxation who was lobbied by the CPA’s, tax accountants and tax lawyers.
January 24th, 2008 at 1:50 am
I’m sorry, who the hell is “President Huckabee”? Keep dreaming, he’s not gonna win it!
Nobody said that repealing the current tax code wasn’t a viable option, but a tax that punishes spending is a quick way to ruin an already struggling economy.
The U.S. simply isn’t a supply-based economy anymore, we are a consumer economy, and as such, for our economy to survive, we must encourage people to continue to purchase new goods and services. Raising the price tag on everything by 23% is a good way to discourage spending.
If a car that once had a price tag of $50,000.00, goes up to $61,500, it becomes much less appealing. Especially considering that in the back of your mind, you know that you still have to add another 7%-8% for the real sales tax…
Same thing goes for the housing mkt. Take a house that sells for $350,000.00, and add the “fair tax”, and it goes up to $430,500.00. Then add 8% for sales tax, and it now costs $458,500.00. That’s an additional $108,000 added to the mortgage. Add another 6% annually for the mortgage… The “fair tax” will bankrupt us all!
January 24th, 2008 at 1:52 am
Sorry, that was supposed to say $108,500.00 in taxes…
January 25th, 2008 at 10:21 am
Trey, your analysis is shamefully not thought out at all. Sounds like you are letting Rush Limbaugh do your thinking for you.
What Rich Lowry doesn’t understand is that Huckabee did his best with the congressmen he had to work with in Arkansas, which is a very blue state. He did an incredible job as a Republican governor in a blue state, leaving the state with a surplus, and cutting taxes multiple times.
If you really want a better tax system, stop tearing down the FAIR tax system or offer an alternative, clearly the status quo is not working. Think about the half a billion dollar Tax Gap that doesnt get paid because our tax codes are so ridiculously obtuse. Under the FAIR tax, it is impossible for a tax gap to even exist.
January 27th, 2008 at 8:02 am
With all do respect to all that believe the 16th Amendment created a new tax that was placed upon the common citizen. PLEASE DO SOME STUDY ON CONSTITUTIONAL TAXATION. This book is very easy to understand. http://ottoskinner.com/b-loophole.html. A deeper study is located at the other website listed. I AM NOT KNOCKING THE FAIRTAX. But I will tell you WITHOUT A DOUBT, it is not a Constitutional type of taxation. As much as I hate to say it, the current income tax is, HOWEVER, the big question is, WHO DOES THE CURRENT TAX SYSTEM ACTUALLY APPLY TO? I honestly can say, I get nothing out of promoting the two books above. ONLY the satisfaction of knowing that ALL who read them will come to a complete understanding of CONSTITUTIONAL TAXATION AND WHY WE MUST GET BACK TO IT.
January 27th, 2008 at 9:43 am
Click on both links attached to my name and you will have a wealth of information at your disposal for learning the truth about CONSTITUTIONAL taxation and why we must get back to it. As i said before. The current income tax system IS Constitutional. The question is, WHO DOES IT ACTUALLY APPLY TO?
January 27th, 2008 at 9:57 am
MESSAGE TO BRENDAN. Obviously you are a Socialist and not a Freedom Fighter. Many of the countries that you mentioned have more poor than they do wealthy. Is this not what the founding forefathers of the USA ran from??? Does not the 250 years that this country has existed and the way of life that we have verses these other countries not prove that SOCIALISM DOES NOT WORK FOR THE MASSES and that capitalism is the best form of government? Why do you want to take us back to the dark ages?
MESSAGE TO JACK DUTTON: Remember that G.W. Bush had an excellent track record working WITH the DEMS in Texas. Where has he gotten as president(In re: to bringing both parties together)??? Being a governor is like being in the little leagues. The president, the house and the senate are the major leagues. GET THE MESSAGE?
January 27th, 2008 at 10:17 am
RON PAUL fully understands the limitations on taxation that the Constitution sets forth. Although he is looked at as a nutcase, the fact is, he is the only true American on the ballot. He is very misunderstood in regards to his beliefs on moral issues. ie: He does not want a national marriage amendment that states that one man and one woman constitutes a marriage. Although he does believe that he believes that FEDERAL government should be limited as establish by the Constitution. SOOO, the point being, when the feds get involved, they have taken away rights from the states which lawfully (Constitutional Law) belong to them. LIMITED federal government with greater local government makes it much, much easier for the people to keep government under control. For those that believe in bigger federal government, please feel free to just throw this post in the trash, RIGHT ALONG WITH THE FREEDOMS THAT YOU NOW ENJOY! Why do you think so many people are moving to the U.S.A from England and other Socialist countries???? BECAUSE THEY VALUE FREEDOMS THAT WE HAVE IN THIS COUNTRY THAT THEY DO NOT HAVE IN THEIR OWN COUNTRIES!!! A flat tax, consumption tax, fair tax ARE “BASICALLY” ALL THE SAME. THE SAME AS THE SOCIALISTIC COUNTRIES THAT THOSE ARE LEAVING TO MOVE TO THE U.S.A!!!!! Click under my name and learn about the one that is aware of the truth and is doing his best to correct the misguided people who cannot think for themselves that live in this country . THOSE ARE MY WORDS, NOT HIS! THE FAIRTAX WILL LEAD TO NOTHING BUT “TAXATION WITHOUT REPRESENTATION.” THINK ABOUT IT!!! ONCE INSTITUTED THERE IS NO TURNING BACK. THE USA WILL ONCE AGAIN BECOME THE COUNTRY THAT OUR FOUNDING FOREFATHERS RAN FROM. THE PROBLEM IS WHERE CAN WE GO??????????????????????????????
January 28th, 2008 at 4:21 pm
Why not tax every dollar going through the federal reserve? The rate would be very small and you could eliminate the IRS and all state revenue departments. Solves the “cottage” trade issue of not reporting income since even all cash folks would have to buy something eventually that would be taxed.
January 30th, 2008 at 10:28 am
Rich is correct in his assumption that the fair tax will not work. After studying pros vs cons on the Fair Tax which includes Neal Boortz’s book the “Fair Tax”, I also find real problems with the fair tax. My reasons are as follows.
1. Workers paying less than 23% will be paying more for goods and services.
2. Rebates to non-taxpayers will create a national welfare program.
3. All eligible persons will still have to report to the government, their addresses, income, number in family, and ages just like it is with the IRS.
4. Rebate mechanisms not equal to everyone.
5. Will hurt Seniors on fixed incomes.
6. Will create political manipulation
7. Doesn’t include state, local, and all other excise taxes.
8. Fair Tax penalizes young singles and families just starting out in the working world.
9. There is no guarantee that the embedded taxes of 22% will disappear and automatically lower prices the same amount.
10. Prices and wages don’t adjust downward either quickly or easily.
11. For the Fair Tax to work, wages will also have to decrease 22%.
12. Massive fraud will occur cheating the government out of revenue.
13. The Fair Tax will significantly benefit the rich.
14. The economy will not flourish because people with money will cut back on spending and also not buy new homes, new boats, new RV’s and new motor vehicles.
15. Like California’s health care bill, administive problems will doom the Fair Tax because it will be too costly.
16. There is no guarantee that doctors and lawyers are going to lower their rates 30% as suggested in Boortz’s Fair Tax book.
Ex-Governor Huckabee, in his speech the night of the Florida primary, is pandering to the public. He thinks the magic words, “Would you like to see the IRS go away”? will jumpstart his campaign again. He doesn’t have a prayer of winning except I thought the same of John McCain.
Finally, the Fair Tax could head down the same road as the “Great Depression”. If the price of goods and services decrease 22% and the wages remain the same, this plan will not work. If the Federal Reserve cuts the money supply and refuses to increase any new money supply as they did during the depression and workers refuse to cut their wages 22%, “bingo” the new depression arrives.
January 31st, 2008 at 7:17 am
MESSAGE TO JT AND OTHERS:
With all due respect to all, PLEASE study Constitutional Taxation. WHY, DOES EVERYONE WANT TO INSTITUTE A TYPE OF TAX THAT WILL TOTALLY BRING ABOUT “TAXATION WITHOUT REPRESENTATION.” There is a big enough problem in Washington right now to where “WE THE PEOPLE” are not being represented. Give the government any form of taxation that IS NOT “SELF GOVERNING” by the people and “THE PEOPLE” will loose all of their freedoms. THINK ABOUT IT, PLEASE. CLICK ON THE LINK ATTACHED TO MY NAME AND BUY THIS CHEAP BOOK. I GET NOTHING OUT OF IT.
February 12th, 2008 at 2:32 pm
Austin Says:
January 24th, 2008 at 1:50 am
I’m sorry, who the hell is “President Huckabee”? Keep dreaming, he’s not gonna win it!
Nobody said that repealing the current tax code wasn’t a viable option, but a tax that punishes spending is a quick way to ruin an already struggling economy.
The U.S. simply isn’t a supply-based economy anymore, we are a consumer economy, and as such, for our economy to survive, we must encourage people to continue to purchase new goods and services. Raising the price tag on everything by 23% is a good way to discourage spending.
If a car that once had a price tag of $50,000.00, goes up to $61,500, it becomes much less appealing. Especially considering that in the back of your mind, you know that you still have to add another 7%-8% for the real sales tax…
Same thing goes for the housing mkt. Take a house that sells for $350,000.00, and add the “fair tax”, and it goes up to $430,500.00. Then add 8% for sales tax, and it now costs $458,500.00. That’s an additional $108,000 added to the mortgage. Add another 6% annually for the mortgage… The “fair tax” will bankrupt us all!
Austin, with your adding the fair tax on top of the price of the house, it is obvious that you have not read the fair tax bill/book. and as far as prices dropping or not, i know that through the fair tax system, the cost of doing business for me will go down so there will be no need for me to increase my prices. also, it would not benefit me to increase my prices as my competitors would take advantage of me doing so and gain more of the market