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Gov. Huckabee’s guest opinion–It’s time for a FAIR tax. 31 May, 2007

Posted by stoptaxing in Fair Tax, federal.
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http://www.redstate.com/stories/policy/taxes/its_time_for_the_fair_tax

We couldn’t agree more.  We also congratulate the Gov. on his successful Internet fund-raising drive.

Something often over looked in the FAIR tax debate is the trade issue.  I believe in free trade, but it is not either a free or a sane trade policy to give imports an advantage.  That is what our current tax system does.  Witness Haliburton moving out of the U. S.  We tax our own companies at one of the highest corporate tax rates in the world and give a near free pass to imports.  The FAIR tax would tax both equally.  Our people would have fair footing in the market place. 

Here is a sample from Redstate.com.  Please click the link above because it gets even better.

I’d like you to join me at the best “Going Out of Business” sale I can imagine – one held by the Internal Revenue Service. I want to completely eliminate all federal income and payroll taxes. And do I mean all – personal federal, corporate federal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment. Instead we will have the FairTax, a simple tax based on wealth.

The FairTax will replace the Internal Revenue Code with a consumption tax, like the taxes on retail sales forty-five states and the District of Columbia have now. All of us will get a monthly rebate to reimburse us for taxes on purchases up to the poverty line, so that we’re not taxed on necessities. We’ll be taxed on what we decide to buy, not what we happen to earn. We won’t be taxed on what we choose to save or the interest those savings earn. The tax will apply only to new goods, so we can reduce our taxes further by buying a used car or computer.

Our current progressive tax system penalizes us for our success. As we climb the ladder, the government lurks on each rung, hungry for a bigger bite of our earnings. The FairTax is also progressive, but it doesn’t punish the American dream of success, or the old-fashioned virtues of hard work and thrift, it rewards them. The FairTax is revenue neutral, so the Government won’t have more money to waste. The FairTax will lower the lifetime tax burden on all of us: single or married; working or retired; rich, poor or middle class. As our disposable incomes rise, so will consumption and our gross domestic product.

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Comments»

1. Alan Coffey - 1 June, 2007

I would like to see more theory on how this would change the dynamic decisions we make every day.

If we tax wealth and consumption we would logically get less of both. I read the FAIR TAX book and still did not see much to address this.

2. David Anderson - 2 June, 2007

I have some concerns about a consumption tax, but the good part about this is that it is replacing the other taxes. This would not tax investment. It would be a pro-savings tax agenda. I would anticipate some short term slowing of the economy, but that should shift relatively quickly because of the following elements. The rebates would put money into the hands of the poor much like a monthly earned income tax credit. This would be a major stimulus. Business investment purchasing is the 3rd largest segment of the economy after consumer and government. Freed from compliance costs which are almost half as much as the coporate taxes themselves, they will invest more into productive business activity instead of defensive business activity.
Charity may take a small hit at first, but soon people will realize that charitable contributions are still untaxed and sales and auctions for charities will sore. Business will develop to cater to charitable fundraisers.
Domestic consumption will grow and exports will grow because domestic production will be treated fairly. The temporary decrease in consumption will be most felt in imports which will no longer have a domestic advantage.
People will feel richer because their paychecks will be larger. They will have a few months however where there may be sticker shock because some prices may rise. (In theory the prices should not rise because it is just a shift in taxation, but since people will be expecting a price increase companies will see how much they can get away with.) Prices will stablize and even decline back closer to pre fair tax levels because of competitive pressures and the realization by companies they are actually paying out less.
There will be no payroll tax. Therefore companies will no longer have a tax on employees. Employment and wages will increase which will spark demand.
The FAIR tax is a supply side stimulus. In the long run it will spark growth and investment.
This country was built on supply side economics if you study the Hamilton plan. Look at what was taxed. Imports, sins, luxuries, and the like were taxed by the duties and excise taxes. Investment and savings were never taxed. A stable money and credit system were established and a free trade common market codified.
Income was only taxed during war. We went from a colonial backwater to an economic world power in 70 years.
My only concern about the FAIR tax is how the first two years of transition is handled. It will make or break its success.

3. Nick Klein - 24 March, 2008

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OrthodoxWiki: Monastery of Vatopaidi
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4. Jeffrey Liakos - 13 July, 2017

I wish Mike Huckabee won in 2008.


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