Now, as I reported last month, Huckabee's surprise second-place finish in the Ames Straw Poll owed some measure of success to a group called FairTax.org. That group backs the creation of a national sales tax. As Scott noted earlier today, former Bush pere Treasury official Bruce Bartlett has deconstructed the intellectual origins of that tax proposal and says that it originated in -- I kid you not -- the Church of Scientology's effort to destroy the Internal Revenue Service after the IRS failed to classify the Church as a religious institution for tax purposes.
The proposal, continues Bartlett, would have devastating effects on not just the IRS, but the poor and middle class, and is thus perhaps the most regressive tax proposal any presidential contender has run on in recent years. As Bartlett explains it, Huckabee (along with other Fair Tax supporters, like Fred Thompson) is running on a platform of raising taxes on the poor and middle class:
The reason I brought up the Scientology connection in the first place was not to create guilt by association. Rather, it was to explain that [Citizens for an Alternative Tax System] had one very specific goal: the abolition of the Internal Revenue Service. Anything else that the nrst might accomplish was entirely secondary. And, in the rush to rid the world of the IRS, the plan's authors neglected some important details, not to mention some key facts....Huckabee can say "If someone is looking for a president who is going to have a mean spirit toward others, I'm not your guy" as much as he likes. But ultimately, it is the policies he supports -- banning so-called "abortifacient" contraceptives, raising taxes on the poor and middle class -- on which the sincerity and authenticity of that statement ought to be evaluated.Unlike every other sales tax in the world, the FairTax actually applies to everything--every pencil, every tank--the government buys. Unfortunately, the FairTax proposal doesn't take into account this increase in government spending. Thus, it will either provoke a massive cut in federal spending or a massive increase in taxes.
And what about the poor who bear the brunt of this highly regressive tax? The FairTax would track every household's monthly income and then cut checks to minimize the pain, a logistical challenge that will ultimately resemble some welfare state nightmare. What's more, this would cost gobs of money, forcing further cuts in spending.
For these and other reasons, every reputable tax expert who has ever looked at the FairTax has concluded that the true tax rate would have to be much, much higher than 23 percent (or even 30 percent) to work--and, even at that unrealistically low rate, the plan would inspire massive tax evasion. In short, the FairTax is a crackpot scheme from beginning to end. That would be true even if the Scientologists hadn't authored it.
--Garance Franke-Ruta
