it is all too easy to make a comment that inadvertently insults someone’s religion. I appear to have done just that. Reader B.S. writes in:
For years I’ve asked the question after each idiotic utterance by a Liberal: is he/she lying or just stupid? It’s a fair question, and now must be asked of some so-called conservatives. Example: Yuval Levin & Ramesh Ponnuru write about Huckabee’s proposed Fair Tax hurting the working poor. Like McCain, they don’t understand the economy much, so perhaps they should leave the commentary to those who do. Any nitwit knows the Fair Tax is a huge benefit to all Americans except tax lawyers and K Street lobbyists. Give the working poor their entire paycheck, give them a monthly prebate of taxes on items up to the poverty level, and give them a booming entrepreneurial economy. Contrary to the benighted Levin & Ponnuru, the working poor will be more than fine, they’ll be way better off, all of them! I know Levin and Ponnuru deserve respect and haved the first amendment, and have the Weekly Standard and National Review printing their prose (obviously without editing for accuracy), but the least we readers should demand is facts, not fiction. And these are the sort of “conservatives” who’ve been accusing Huckabee of being an economic liberal? Puhleez.
The actual sentence to which B.S. refers, in this article, makes a more modest claim than the one he attributes to us: “[Huckabee’s] distinctive proposal, a form of national sales tax, would hurt many working families.”
The Fair Tax proposal aims to raise the same revenue as the current tax code, and without assuming vastly higher growth to reach the required revenue level. Since affluent Americans consume a lower proportion of their income than poorer Americans do, they would get a tax cut. That tax cut, on static assumptions, has to be made up for by tax increases elsewhere.* To the extent that the “prebate” included in the FairTax shields the very poor from taxes, those increased taxes fall on people in the middle of the spectrum. Either the after-tax price of everything they purchase would go up by 30 percent, or their wages would fall 23 percent, or a little of both. In addition, their state and local taxes would probably increase, since state and local governments would have to pay the new 30 percent sales tax for the numbers to work.
*Huckabee suggests that the people who would pay the extra taxes are black-market economic actors; he mentions prostitutes in particular. This line works politically for the same reason it won’t work economically: There aren’t many of them. Also, it is not clear why pimps would start collecting sales taxes. They are not legendary for complying with existing tax laws.






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