Monday, December 24, 2007

They must not read the blog

Because they certainly haven't heard of my boy. Then again, this is the L.A. Times:

Mike Huckabee, one of the most conservative Republicans in the 2008 presidential race, has embraced one of the most radical ideas on the campaign trail: a plan to abolish all federal income and payroll taxes and replace them with a single 23% national sales tax.

"Radical", "one of the most conservative", so much for objective journalism.

He is the only major presidential candidate to make the idea central to his campaign. "The first thing I'd love to do as president: Put a 'going out of business' sign on the Internal Revenue Service," he said at one debate.

While amusing, this is completely false. In one of the early Republican debates, Ron Paul explained how, "in my first week, I eliminated the IRS". I suppose that the Times can claim that Paul isn't a major candidate, but I'm not sure that's accurate at this point. Paul will almost certainly finish in front of "major" candidate Fred Thompson in Iowa and N.H.; despite McCain's latest "surge" in the latter state, I'd be very surprised if he finishes ahead of Paul in either state.

There's something to be said for a "fair tax", but, even supposing such a scheme could be enacted, it would probably do more harm than good, for a variety of reasons.

First, such a tax will fall unfairly on the lower and middle classes--as all taxes inevitably do. The very rich will have no trouble purchasing their yachts from abroad and shipping them to their millionaire estates, though, in fairness, since Huckabee is something of a protectionist, a tariff could theoretically correct this problem to a large extent.

Second, although tax reform is to be preferred to tax cuts, without concomitant decreases in spending, any deficits will have to be paid by the nation's children at a later date. I have no idea how much revenue might be raised by a "fair tax" of this nature; but it's wise to be wary of more unbalanced budgets since Huckabee has yet to explain how he'd trim government fat--unlike Paul who wants to cut whole departments en masse and enact massive foreign policy changes which would save the country hundreds of billions of dollars.

From the article:

To ease the effect on the poor, they propose a "prebate" -- a monthly cash payment to every family -- to cover sales taxes on spending up to the federal poverty level...

Critics argue that this aspect of the plan would create an unwieldy new government program akin to welfare.

A report by the president's tax-reform panel said such a program could cost $600 billion a year -- "which would make it America's largest entitlement program," the report said.

Why not make it an exemption? Creating new government programs is a bad idea, especially for a so-called conservative. Count me among the skeptics.

Independent analyses have concluded that the tax would have to be far higher than 23% to maintain the government at current levels -- especially if Congress did not eliminate popular tax breaks, such as the mortgage-interest deduction.

William G. Gale, a tax expert at the centrist Brookings Institution think tank, estimates that the levy could run as high as 50% -- a tax so steep that it would be an invitation to mass tax evasion.

I know very little about economics, but these numbers seem high. When Steve Forbes was running for president back in 2000, a lot of people were talking about a national sales tax, and I remember someone putting the figure at between thirteen and fifteen percent. Then again, this was before Bush's expensive war on terror, so perhaps the number has climbed substantially.

Third--yes, we're still in the middle of a list--creating a new form of tax is a bad idea because, even if the IRS is effectively killed, there's no telling when it will be brought back from the dead. In that case, we'll be faced, not just with a sales tax, but an income tax.

I like Paul's plan better: get rid of the IRS and replace it with--nothing. Unfortunately, this pipe dream is only possible if we reexamine our view on the proper role of government. A return to a constitutional republic of limited size doesn't require the IRS; a compassionate conservative government, one that wars on all terror, everywhere, and provides cradle-to-the-grave payouts to members of society, needs to rob Peter to pay Paul. Those are just the facts.


troutsky said...

These guys dissing the IRS is pandering, but they are hardly to blame for the tax code.It is blaming the messenger.I am intrigued that the whole movement for tax "fairness" concentrates on equality and never mentions justice.Like it is some kind of level playing field.A Christian should be able to talk about re-distribution with his head held high.It is funny to me how Americans SO hate the idea of the Taliban or Ayahtollahs, but seem fine with Ministers.

A Wiser Man Than I said...

.I am intrigued that the whole movement for tax "fairness" concentrates on equality and never mentions justice.

I don't think justice has anything to do with it. When people speak of justice, they usually mean mercy. It's not unjust that people who do not work do not eat; it just isn't very compassionate. Nor is it just to take money from those who do work to give to those who don't.

A Christian should be able to talk about re-distribution with his head held high.

It depends. First, helping the poor is important, but the more important thing is to care for a man's soul. Our welfare programs don't pretend to do that.

Second, by mandating re-distribution, compassion--which cannot be compulsory--goes out the window, leaving us with a sense of justice which is false--and one which most people recognize as such.

It is funny to me how Americans SO hate the idea of the Taliban or Ayahtollahs, but seem fine with Ministers.

I guess I don't see the joke. Then again, I don't hate the Taliban as much as is proper for an American these days.