A FairTax rally held in Jacksonville, FL on Sunday drew dark-horse Presidential candidates Mike Huckabee, former Governor of Arkansas and former Alaska Senator Mike Gravel, both of whom have made the revenue reform concept part of a theme in their campaigns. Although Huckabee is not considered a likely winner in Florida, his efforts as of late have been seen by some as an attempt at running for Vice-President - specifically, as a possible running mate for John McCain. He may be able to build support among the conservative base, especially evangelical voters. Huckabee has recently been supportive of McCain’s military service record in debates, while along with fellow contender Giuliani, criticizing Romney.
Huckabee was also in town for other appearances, including at the Jacksonville Landing. He may have originally been scheduled to preach a sermon at Trinity Baptist Church, but the event was possibly canceled. Instead, Huckabee visited First Baptist Church of Orlando before stopping in Jacksonville.
January 28th, 2008 at 12:13 pm
I found your site on technorati and read a few of your other posts. Keep up the good work. I just added your RSS feed to my Google News Reader. Looking forward to reading more from you.
Mike Harmon
January 28th, 2008 at 10:21 pm
Yes. Lets support a tax system that is going to raise taxes on the middle class and pay into a tax code where a 23% rate means that you will pay $1.30 for an item that costs $1.00. The Fair Tax is the most ill-conceived idea ever to have this degree of support since the ratification of the 18th amendment. Let’s hope this idiot idea dies with Ayatollah Huckabee’s campaign
January 29th, 2008 at 1:01 am
Let’s support a tax plan with 10 years of research & analysis, cost $23 million, a tax plan which has over 600,000 grassroots supporters, a tax plan that is endorsed by 80 professional and university economists, and is co-sponsored by 72 Congressmen.
Let’s support a tax plan that has a sound methodology for estimating the tax base and computing the FairTax rate. A plan whose specified rate of 23 cents of every dollar spent is eminently feasible. This proper tax rate has been carefully worked out; and it does the job of: (1) raising the same amount of federal funds as are raised by the current system, (2) paying the universal rebate, and (3) paying the collection fees to retailers and state governments. Also consider that only 30% of the people pay Income Tax, whereas 100% will pay with the FairTax. This includes the 50 Million visitors to America as well as illegal aliens and 18 million income tax evaders.
Let’s support a tax plan where states which already have the infrastructure in place are paid to collect the FairTax. One which eliminates the IRS as we know it, and oversight will reside under the Treasury Department, but the government’s responsibility will be over a far smaller “universe” of tax collection points making compliance oversight far less costly and far more effective than the current income tax.
Let’s support a tax system that rewards success not punish it as the income tax does. The FairTax untaxes the poor by eliminating the Income tax, Social Security tax and Medicare Tax. All legal American households will get a prebate to pay the taxes (up to the poverty level) on the necessities.
Let’s support a tax system in which hard economic research by respected scholars on the price of consumer goods reveals that from 20% to 25% (depending on the product) of all prices today represent hidden income taxes and payroll taxes. Once these taxes are repealed and replaced with the FairTax, it is likely that market pressure would force retail prices to fall. Eliminating embedded taxes will also do something else — it will remove significant price disadvantages suffered by American producers competing with tax-free imports. Eliminating corporate income taxes and capital gains taxes, which the FairTax would do, would likely make the American economy the most desirable place in the world to do business.
January 29th, 2008 at 2:35 am
Hey Harold,
Thanks for the response. I’ve been back and forth on this one for a while and I’d love to argue this with someone that is articulate on this matter so let me know what you think. My first problem with this tax plan is that I will spend $1.30 on a $1.00 item and Fair Tax supporters call this a 23% “tax inclusive” rate. First, can you tell me what “tax inclusive” actually means? I’m having trouble with that one. Second, if this tax plan is so good, why do most tax analysis groups say that this tax system, if it is revenue neutral, will dramatically raise taxes on the middle class and lower taxes on the wealthy. I have many other objections/observations on this plan and I’d sincerely appreciate your answers in a genuine give-and-take.
January 29th, 2008 at 2:37 am
Oh Harold,
Sorry… third question… do you think its legitimate to call $1.30 price on a $1.00 item a 23% tax rate? Or is this some marketing plan dreamed up by the $23 million dollars you all spent devising this POS tax code?
January 29th, 2008 at 12:23 pm
Why do people have such difficulty understanding just how much hidden taxes are passed along to the consumer now?
Under Gravel’s plan, everyone would recieve a monthly pre-bate check. This would cover the sales tax on the average costs of the basics.
Since most of the truly poor don’t spend the average on basics now, they would keep the extra money.
Another much overlooked benifit is ecological.
The sales tax would only apply to New items. Remember re-use & recylce?
If you are a medium income wage earner, there is little you can do to reduce your taxes. Under the Fair Tax, your options to reduce your tax liability are many.
e.g. If I buy fabric and make clothes, I am paying much less tax than if I bought the clothes.
If I grow my tomatoes, they are tax free.
If I shop for used items, those are tax free.
The very wealthy often pay very little in taxes and have hundreds of ways to avoid tax. A tax on thier consumption would be inescapable.
As for the opinions of “tax experts” lol, yeah, these guys are going to support a tax code that doesn’t require the services of their expertise?
January 29th, 2008 at 4:07 pm
A consumption tax could garner more support if services/labor were taxed at a lower rate than new products. More US dollars would remain in domestic circulation putting Americans to work in service and repair, and less would be sent overseas to purchase cheap consumer goods. Such a plan would appeal to the labor unions, the environmentalists and the economists.
January 29th, 2008 at 9:13 pm
Tax inclusive vs. tax-exclusive:
Say you’ve got a $1 item- the tax will be $.30. 30 cents is 23% of $1.30, but it’s 30% of a dollar. The question is: do you quote the rate as a percentage of the total (price plus tax), or do you count it as a percentage of the price only, excluding tax?
Income taxes are typically presented as tax-inclusive, but sales taxes are quoted as tax-exclusive. …so it’s important when comparing rates to be clear that 23% inclusive is the same rate as 30% exclusive- so we’re comparing apples to apples.
Thus it doesn’t particularly matter which way you quote it, so long as when you compare it to the plan it proposes to replace, you quote that rate using the same methodology.
In other words, that 25% income tax rate, if quoted tax-exclusively for comparison, is 33.3%.
January 30th, 2008 at 3:34 pm
Ronald,
You should probably checkout the FairTax calculator.
http://www.fairtax.org/site/PageServer?pagename=calculator
I have yet to find an middle class income level that would be worse off under the FairTax. And it does a good job of itemizing all of the expenses.
People also seem to forget that the FairTax completely untaxes the poor. With today’s tax system, the poorest of the poor still are paying 7.65% towards medicare and social security taxes. With the FairTax, everybody gets a prebate check every month to pay for sales taxes up to the level of poverty.
All law-abiding citizens would be better off tax-wise because we now can tax the trillions of dollars that is currently untaxed from black market businesses, illegal immigrants, and tourists.
Sounds like a heck of a deal to me.
February 1st, 2008 at 9:49 pm
Chris,
Thanks for the comment and the explanation. I don’t understand how a tax on an 1.30 item that normally costs $1 is 23%, whether computed tax inclusively or exclusively. I’m a trained engineer with a background in mathematics and if I don’t understand it, how do you think others respond to a tax system that says its going to tax items at a 23% rate. Do you think that most people that think a Fair Tax of 23% means that a can of peas costing $1 is going to cost $1.23 or $1.30. Do you think its a fair presentation of a tax system where a $1. item that costs $1.30 is presented as a 23% tax? If Fair Tax proponents were serious about a fair presentation of a tax system why not start out labelling a sales tax with the proper rate that every application of common sense dictates?
February 1st, 2008 at 9:59 pm
Jim,
What I think conservatives should not be proposing at this time is a massive entitlement based upon monthly prebate programs. Aren’t you all for getting rid of the Earned Income Tax Rate? For a non-bullshit treatment of the Fair Tax go to http://en.wikipedia.org/wiki/Image:NRST-percentile.png which details who will be paying an increasing share of taxes under the Fair Tax plan. Unless you are very poor or very rich get ready to pay more taxes under President Huckabee and his Fair Tax plan
February 2nd, 2008 at 9:27 am
Gov. Huckabee’s advocacy of the FairTax is the single most important policy position in this election. Research findings explain why:
The FairTax rate of 23 percent on a total taxable consumption base of $11.244 trillion will generate $2.586 trillion dollars – $358 billion more than the taxes it replaces [BHKPT].
The FairTax has the broadest base and the lowest rate of any single-rate tax reform plan [THBP].
Real wages are 10.3 percent, 9.5 percent, and 9.2 percent higher in years 1, 10, and 25, respectively than would otherwise be the case [THBNP].
The economy as measured by GDP is 2.4 percent higher in the first year and 11.3 percent higher by the 10th year than it would otherwise be [ALM].
Consumption benefits [ALM]:
• Disposable personal income is higher than if the current tax system remains in place: 1.7 percent in year 1, 8.7 percent in year 5, and 11.8 percent in year 10.
• Consumption increases by 2.4 percent more in the first year, which grows to 11.7 percent more by the tenth year than it would be if the current system were to remain in place.
• The increase in consumption is fueled by the 1.7 percent increase in disposable (after-tax) personal income that accompanies the rise in incomes from capital and labor once the FairTax is enacted.
• By the 10th year, consumption increases by 11.7 percent over what it would be if the current tax system remained in place, and disposable income is up by 11.8 percent.
Over time, the FairTax benefits all income groups. Of 42 household types (classified by income, marital status, age), all have lower average remaining lifetime tax rates under the FairTax than they would experience under the current tax system [KR].
Implementing the FairTax at a 23 percent rate gives the poorest members of the generation born in 1990 a 13.5 percent improvement in economic well-being; their middle class and rich contemporaries experience a 5 percent and 2 percent improvement, respectively [JK].
Based on standard measures of tax burden, the FairTax is more progressive than the individual income tax, payroll tax, and the corporate income tax [THBPN].
Charitable giving increases by $2.1 billion (about 1 percent) in the first year over what it would be if the current system remained in place, by 2.4 percent in year 10, and by 5 percent in year 20 [THPDB].
On average, states could cut their sales tax rates by more than half, or 3.2 percentage points from 5.4 to 2.2 percent, if they conformed their state sales tax bases to the FairTax base [TBJ].
The FairTax provides the equivalent of a supercharged mortgage interest deduction, reducing the true cost of buying a home by 19 percent [WM].
ALERT: Kotlikoff refutes Bruce Bartlett’s shabby critiques of the FairTax.
February 3rd, 2008 at 7:34 pm
Yes, yes… I know a tax system devised by people who have been trying to get rid of progressivity in the tax code all of the sudden is the most progressive system in the world. The Fair Tax is merely a trojan horse designed by people who want to destroy the idea that people should be taxed according to their ability to pay. All of these economists are either from “free market” institutes or conservative organizations. They are the economic side of the same people who told you the Iraqis were going to greet us with flowers in the street.
If you are middle class, you are going to pay more in taxes under the Fair Tax plan. If you feel like doing this, my suggestion is that you write an additional check to the IRS this upcoming April.
Any kind of tax system that says that everyone is going to be taxed at a lower rate and raise the same amount of revenue needs to reread the First Law of Thermodynamics, which states that the amount of matter in the world can neither be created or destroyed.
Simply put this system is going to hurt the middle class at the expense of the rich. All of these assumptions above are predicated on the fact that people are going to pay their taxes and that everyone is going to pay fairly. That hasn’t been my experience whatever tax code you should decide on.
Let’s see… broadening the tax base. Does that mean that I’m going to pay $300/month more on top of my rent to pay the Fair Tax on my rent? Yep, sure does.
March 2nd, 2008 at 2:41 am
Fairtax calculator should wake everyone up — its a farce. Why doesn’t it have a place for your medical costs? Because all medical cost is taxed under fairtax.
Why doesn’t the calculator have a place for your rent?
Because rent is taxed under fairtax.
Why isn’t there a place for your car insurance ? Because car insurance premiums are taxed.
Why isn’t there a place for your health insurance?
Because health insurance is taxed.
Why isn’t there a place for utilities?
Because all your utilities will have to pay the fairtax.
Why isn’t there a place for how much gasoline you buy?
Because gasoline taxes will almost triple.
March 2nd, 2008 at 11:57 pm
Fairtax is the funniest tax proposal since Donald Duck’s rich uncle suggested a Quacking Tax.
Fairtax has a novel approach — just tax the federal government for 500-800 billion dollars. Who knew thats all we had to do since George Washington — make the federal government pay itself.
Neal “Magic Wand” Boortz writes “The federal government ITSELF will become a MAJOR taxpayer.” Page 148, The Fairtax Book.
Brilliant Neal — just brilliant. The federal government will just pay 800 billion in taxes. Sure saves the people a lot of money. Only, Neal — didn’t you say “only people pay taxes?”
Yes, I think you did Neal. When you told us why corporations can’t really pay a tax. But now you say, “the federal government will become a major taxpayer.”
Wow. What a difference a few pages make, cause in one part of his book, only people can pay taxes. But on page 148 — the government can and will pay them. Not just pay some - but be a MAJOR taxpayer.
Why would Neal have to pretend (cause he doesn’t really believe it) that the federal government will pay a major part of our taxes for us?
Here is why — because Neal MUST include that 500-800 billion in government receipts. He HAS to include that, or the tax rate can’t be 23%. Neal simply MUST pretend the tax rate is 23%. Otherwise, this house of cards comes tumbling down.
Just because of this ONE fallacy of the government paying itself a huge tax — the real tax rate would have to be 40%. And the other fallacies that fall from this, would completely collapse the fairtax plan.