Huckabee: Still not Fair
Mike Huckabee seems like a really rice guy. All political and ideological issues aside, he comes across as warm and like-able; someone who genuinely believes in his own message. Set against the backdrop of his cold, false-sounding, flip-flopping competition, he becomes even easier to warm up to.
His witty, disarming performances in nationally televised debates have been enough to make even the most jaded politico crack a smile. And despite the fact that he’s up against vastly-better funded campaigns and more recognizable national figures, he’s still managing to creep up in the polls. It’s as if someone forgot to tell him that he’s a massive underdog that has no business factoring into the primary process, let alone winning the whole thing.
Taken all together, it’s enough to make you want to root for the guy. That is, until you examine his policy proposals.
There’s a reason none of the experts expected Huckabee to seriously figure into the presidential race; his policies simply don’t stand up to close inspection. Worst of all is his “Fair Tax” proposal, which would do away with all Federal income, capital gains, and estate taxes, replacing them with a universal sales tax of roughly 25%.
At first blush, the idea has its appeals. No one would ever have to file a tax return again. There would be no corporate tax loopholes, no arcane exemption structures, and no IRS. And of course, there is a certain “fairness” to taxing people’s consumption as opposed to their earnings. Like Huckabee himself, the proposal is charming to a certain degree.
Unfortunately, it just doesn’t work. The idea is fundamentally flawed, and would create more problems than it solves. First of all, replacing the income tax with a consumption tax in effect shifts the tax burden from the rich to the middle class. After all, people of lesser means tend to spend a greater deal of their income than those currently in a higher tax bracket.
Second, it puts the economic incentive on the wrong end of the loop, so to speak. One of the weirder incongruities of economic growth is that individual savings don’t really help the economy; in order to spur growth, you want citizens to try and earn as much and spend as much as they possibly can can. Taxing people’s earnings won’t convince them to work less. Think about it, have you ever heard someone say “I don’t think I’ll work overtime today, taxes are too high”, or “I know there’s a more efficient way to do this, but why bother? The government will still get a cut”? The bottom line is, under the current system, the citizen is still rewarded for efficiency and hard work; which is also true of the fair tax system. The difference is on the spending end; higher sales taxes will induce people to consume less, which any economist can tell you is not good for the GDP. The Fair Tax would have people stocking away a greater proportion of their earnings, which sadly, isn’t actually a good thing for the economy.
Finally, the end result of Huckabee’s proposal would be a gargantuan tax cut across the board. While this fits nicely into a small government, conservative world-view and holds broad appeal for many right-leaning thinkers, for it to work it would have to be coupled with matching spending cuts. And as we have seen in recent years, the only thing Republicans and Democrats in Washington can agree on is that they will not, under any circumstances, cut spending. So unless we’re willing to swallow another trillion dollars in federal deficits, the Fair Tax just won’t bring in enough revenue to keep to government running.
This proposed tax overhaul is a perfect microcosm of Huckabee’s campaign; initially intriguing, honest to a fault, and doomed to fail. It’s sad, really, because we haven’t had someone in the Oval Office who didn’t make half of the country foam at the mouth for a very long time. Huckabee appears to be the kind of personality the middle majority could rally behind, if only his actual policies weren’t so flawed.
