Thursday, June 19, 2008

Mother Jones and The Fair Tax

I have some comments on gay marriages, which began taking place in California on Wednesday June 18. It raises some relevant questions and an example of my occasional departure from the boilerplate “conservative” positions. I used quotes because I think many boilerplate “conservative” positions are not necessarily consonant with a conservative philosophy but mainly sentimental reactions, which is all that liberals often think conservatism is, anyway. But, Mother Jones posted an article on Huckabee and The Fair Tax on Tuesday: Mike Huckabee's Fair Tax Fallacies (I think The Fair Tax should be made a flagship Republican issue (just another idea that John McCain is not yet on board with – and yes, I’m supporting McCain enthusiastically), and this article raises some standard misguided objections, so I’m posting this, first. A couple of points in this article are legitimate things to consider, though the fear exaggerates the reality. But, mostly, assuming the article is genuine(?), it overlooks and misrepresents a number of factors. Here is the comment I left at the MJ web site:

First, there are statements that countermand each other. The article falls to the standard liberal concern that it is "regressive," because lower-income people must spend more on essentials. This overlooks the obvious fact that people have more extravagant lifestyles precisely because they spend more, and thus will pay higher taxes. Taxes will be a lot higher on BMW's than on a Ford Taurus for example, never mind on planes, boats, and travel, for only a few examples. If people save on taxes by saving or investing, more power to them and more power for society: savings and investment (jobs in liberal-speak) are encouraged.

Later, the slip of the writer's liberal perspective is showing when the article frets the possibility of companies pocketing their tax savings rather than passing it on to the consumer. No one with the barest comprehension of how markets work would raise such a silly idea. Companies will and should always try to maximize profits, but they don't set prices, markets do. And, the "prebate" goes to all citizens, so middle-class taxes are lowered, too.

You concede that economic activity will increase, but greatly understate the probable extent. No income tax for doing business in The United States? Recall that Reagan's tax cuts doubled federal revenues over his term (unfortunately, federal spending tripled). But, if that was an economic surge, The Fair Tax might provoke an economic avalanche. (i.e., economic activity and opportunity on steroids)

This is not just good; the fact is that it is now essential. We are a short distance (the next term will realize it, from a tsunami of entitlement liability arriving for an over-promising federal government. Even I doubt that even the Fair Tax's rush of economic activity will cover the drastic revenue shortfall. In brief, The Fair Tax is the least we can do, given the mistakes made. Frantic and futile foggy-headed government agents will lunge at alternative answers to meet the demand by raising taxes, restricting benefits and inflating away the value of the dollar to pay its obligations with cheap money, all of which will in short fashion make matters worse and increase hardship.

Finally, the article lapses into a typical cynical analysis about a politician's political motivation. Another, straightforward explanation for Huckabee's support of The Fair Tax is the peculiar one which I also embrace: HE ACTUALLY BELIEVES THAT THE FAIR TAX WILL BE GOOD FOR AMERICA AND AMERICANS! (Difficult as that may be to contemplate)

It is true that a vigorous system must be put in place to insure that all imported items bear the same tax to maintain a level playing field for American business. And, it's true that barter and caution in consumption will be encouraged. They used to call that "thrift." Now, it's a BAD thing?

Oh, and speaking of terms, a 5% growth in spending across Huckabee's over ten years as governor of Arkansas, would be around the rate of inflation and a little over 500 million dollars per year. Can you do a little math? That fits your numbers almost exactly. The fact is that taxes as a percentage of income were approximately the same at the beginning and end of Huckabee's governorship. You know what they say about how statistics can be presented… In brief the criticisms of The Club for Growth were mercenary rewards for CfG contributors with political or personal anti-Huckabee interests. Romney's and Thompson's criticisms were transparently political.

In truth, with no Fair Tax, economic travails appear utterly unavoidable.

12 comments:

Anonymous said...

www.NoFairTax.org !!!

Larry said...

I tried to look at the web site that the commenter posted, but, it was inaccessible, the URL apparently up for sale.

I have no vested interest in The Fair Tax, except that it would end federal intrusion into private conduct and affairs, free people to determine the disposal of the product of their own labor and thereby also strenthen and restore the market, and according to everything I can imagine, would infuse the American economy with new resources and activities like no idea has in my lifetime (probably in history). And, that is something that the American economy sorely needs, with the liabilities that it has imprudently taken on.

If someone has information indicating otherwise, I'd be happy to look at it. I do know that the current system is a wasteful, tyrranical, and UNfair disaster.

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