By Walt Thiessen ∙ NolanChart ∙ January 5, 2007
In the aftermath of the Iowa caucuses, more information is coming out about the winner on the Republican side, Mike Huckabee. The news is not good.
One of the things that happens when a new frontrunner emerges in a campaign is that we learn more about him. This is already happening with Gov. Mick Huckabee of Arkansas, and the news is definitely not good. Take a look at this YouTube video of Gov. Huckabee speaking in 2003, presumably before the state legislature in Arkansas, probably a "State of the State" message, and you'll see why I've decided to call him Tax Hike Mike from now on.
Tax Hike Mike is shown on camera favoring all of the following tax hikes:
Tax Hike Mike indeed!
Huckabee Deceives The Public About His FairTax Proposal
The video blows the covers off a really bad candidate for president. I dug a little deeper into Tax Hike Mike's views on taxes. Of course, most Ron Paul supporters now know that Huckabee also supports the misnamed "FairTax." In fact, he is playing very fast-and-loose with a major flaw in the FairTax logic, the logic of a "tax-inclusive" tax. This is the supremely deceptive idea that even though all other sales taxes are "tax-exclusive," the FairTax proposal calls itself a "tax-inclusive" tax.
Here's what Tax Hike Mike said about the FairTax on Fox News' "Choosing The President" interviews on November 18, 2007:
Interviewer: This would be a sales tax of 23% on almost every good and service you buy or anyone buys. But a bipartisan panel named by President Bush say to raise enough money, the rate would have to be 34%.
Tax Hike Mike: They didn't really study the FairTax. They simply studied a type of consumption tax, not the actual proposal that was designed by some of the leading economists in this country. It is a rate of 23%. It's not 30% or 34%, as some of the critics complain.
Well, anyone who has ever figured out the sales tax on a purchase knows that answer, right? It's 23% of $1, which is 23 cents. Add that to your $1 purchase price, and the total amount due is $1.23, right? Well, imagine your surprise when the clerk rings it up for $1.30. You protest, "Hey, that's not right. It's supposed to be a 23% tax, not a 30% tax. Tax Hike Mike said so!" The clerk calls over the store manager who replies, "No, the 23% tax rate is a tax inclusive rate. In other words, it's the effective tax rate when you include the tax in the final purchase price and then take that total and divide it into the amount of tax itself."
Meanwhile, your mind is boggled by all this "tax inclusive" BS, and you start getting mad. You accuse the store manager of trying to rip you off, but it does no good. He ends up calling the IRS' replacement, the new bureaucracy which monitors and collects the FairTax sales tax revenues from merchants. A FairTax bureaucrat gets on the phone and confirms that the price you are being charged is correct. By this time, you're going ballistic.
So how do you get a 23% tax from a 30% sales tax? Get ready to hide from your old math teacher so we can set up this math problem. You take the final price you're being asked to pay for the candy bar ($1.30) and divide 30 cents (the amount of the tax for this purchase in dollars and cents) into that figure. 0.30 divided by 1.30 equals (drum roll please) 23%!!! That's what they mean by the FairTax being "tax-inclusive." The dollar value of the tax itself is included in the base against which you apply the 23% rate. What baloney that is! No other sales tax calculates the amount of tax you pay that way.
The FairTax is Fraudulent
Frankly, I don't see why more people aren't calling the FairTax an act of deliberate fraud, because that's what it is. How can I say that? Simple. I looked up definitions of the word "fraud" on Google. According to what Google found, Wikipedia says, "In the broadest sense, a fraud is a deception made for personal gain." Well, let's see, Tax Hike Mike is using this deception to try to help him win the presidency. I'd say that qualifies as "personal gain," wouldn't you? And the Utah courts web page says fraud is, "an intentional perversion of truth; deceitful practice or device resorted to with intent to deprive another of property or other right." Yup, I'd say that the FairTax definitely fits that definition.
So why hasn't Tax Hike Mike been arrested yet?
I'm sure this is enough for FairTaxers to start jumping down my throat (as they always do) about "how you haven't studied the FairTax closely enough" and about "how you don't know what you're talking about." Yet, the funny thing is, I've never had one of the FairTax advocates deny that the above math is correct. I even ran it by Genie Hays of FairTax.org in May 2006 via email, using the exact same scenario I described above. At first, she kept dancing around the issue, but I finally got an email confirmation from her where she said, "Oh! He [the merchant] must charge a 23% inclusive – 29.9% exclusive tax." I kept the email as a permanent record of the exchange. Of course, the 29.9% figure rounds up to ....(drumroll again please)....30%.
Ron Paul Has The Answer
I remember seeing an interview of Paul where he was asked about the FairTax. He said he didn't really favor it. He favors getting rid of the IRS and replacing it with nothing. He agreed that the FairTax was marginally better than the current income tax system, but he did not endorse the FairTax. But Paul is much more eloquent than even this. In an article he wrote for lewrockwell.com in 2006, Paul says:
"Many conservatives have touted the Fair Tax proposal as an issue in the upcoming election. A pure consumption tax like the Fair Tax would be better than the current system only if we truly did away with the income tax by repealing the 16th amendment. Otherwise, we could end up with both the income tax and a national sales tax. A consumption tax also provides more transparency and less complexity. But the real issue is total spending by government, not tax reform. In other words, why change the tax structure if spending stays the same? Once we accept that the federal government needs $2.7 trillion from us – and more each year – the only question left is from whom it will be collected. Until the federal government is held to its proper constitutionally limited functions, tax reform will remain a mirage."
Ah yes. Spending! This is the issue that Tax Hike Mike doesn't really like to address very much. He doesn't bother to talk about how he'll go about cutting Federal spending. He thinks that all he has to do is to talk about the FairTax.What's worse is that in 2000 he came out against a national sales tax. In fact, he has quite a history of flip-flopping on taxes. According to the On The Issues website, he currently supports a flat tax to keep up with globalization. He brags that he raised taxes 5 times as governor but cut taxes 94 times. Going back to 1992 he pledged "no tax increase under any circumstances." He also said in January 2007:
"I wouldn't propose any new taxes. I wouldn't support any. But if we're in a situation where we are in a different level of war, where there is no other option, I think that it's a very dangerous position to make pledges that are outside the most important pledge you make, and that is the oath you take to uphold the Constitution and protect the people of the United States"
The ultimate in flip-flop. Clearly, the idea of cutting other spending in order to finance a war is outside of Tax Hike Mike's way of thinking.
This man is dangerous. It's becoming essential that Ron Paul defeat Tax Hike Mike for the Republican nomination. Paul is the only candidate who understands that in order to cut taxes you also have to cut spending, and Paul is simultaneously willing to support doing both. That's the way a responsible candidate for president behaves. Tax Hike Mike could take lessons from Dr. Ron Paul.