Mike Huckabee was on Fox News Sunday, pushing his "Fair Tax" plan (that's anything but fair). He plans to eliminate the income tax and replace it with a consumption tax of about 30%. He plans to also create "prebates", which the government would send a check every month to every taxpayer equivalent to what someone living at the poverty level would pay in taxes for “necessities”. (Don't they sort of do that now - wouldn't that be welfare & SNAP?)
To his credit, host Chris Wallace mentioned analysis done by the Urban-Brookings Tax Policy Center which found that the average rate of the lowest income folks would exceed 33%, while the average for the folks at the top would fall to less than 16%.
Of course, Huckabee was quick to point out that "they have it exactly wrong", because, of course they are. (what, you think Huckster is wrong? What is wrong with you?! hehe) He even made sure to note that the "tax study is one that has been discredited by the people who spent over $20 million, very thoughtful economic study developing the FairTax. It’s not just some political idea".
Discredited? WHAT? What do the folks at Urban-Brookings Tax Policy Center have to say for themselves?
“He has the distributional benefits backwards,” wrote William Gale, a senior fellow at the Brookings Institution and a former senior economist for President George H.W. Bush’s Council of Economic Advisers. “The notion that a tax on consumption will help the poor and hurt the rich is contrary to just about everything that is known about rich/poor spending and income habits, not just our model.”
He also had this to say:
“The ‘people who spent over $20 million on this did not understand for a decade how the tax actually worked, and it took two papers by me as well as other work – for example, the Bush tax reform panel – to convince these people that they had vastly misstated the tax base because they made 20-25 percent of government disappear.”
Not to feel left out, Len Burman, director of the Tax Policy Center, had a few things to say too.
"The idea that the poor would do better under the FairTax plan is simply wrong. This issue doesn't involve complicated economic analysis,” wrote Burman, who among other things served as a deputy assistant secretary for tax analysis in the Clinton Treasury Department. “It's simple math, and the FairTax advocates have repeatedly and willfully flubbed the math.”
“High-income people spend only a fraction of their income, so they effectively benefit from a giant tax exemption compared with an income tax.”
Quite sad and pathetic when (a) the network you worked for pans, rather than pushes, your plan, and (b) the people you're attempting to discredit actually turn around and discredit you.