Hank  Adler

It is almost uncanny that the FairTax envisions every state forming its own State Sales Tax Administrating Authority, an almost identical plan to each state forming its own insurance exchange under Obamacare. (Identical to Obamacare, the Federal government must assume the role of the State if the State determines not to form its own State Sales Tax Administrating Authority.) In the FairTax Fantasy, we discussed the reality that many states would determine not to form such entities and that the Federal government would be required to step into the breach. We predicted the Federal government would fail in this role. We discussed the accompanying nightmare that the government would have with getting people to signup, determining whether they were entitled to the "Prebate" they were requesting and how it could be administered over a long period of time. Sound familiar?

In the FairTax Fantasy, we discussed forecasts of the necessary national sales tax rate to abandon the income tax. We presented an opposing view with respect to the analysis being presented by the proponents of the FairTax, not terribly different than the position of Republicans at the outset of Obamacare.

Today, it is impossible for President Obama to escape his promises of people being able to keep their doctor and having a reduction in insurance costs of $2500 per family. None of those promises were possible when he was making them and the reality is in concert with what the naysayers predicted. With respect to the FairTax, the rate promised was illusory a decade ago and with the insane increase in Federal spending since the initial proposal in 1999, more illusory today.

The FairTax promoters continue to contend that a $30 tax on a $100 purchase is a 23% tax. If the issue becomes a part of the 2016 presidential contest, voters will believe that promising a tax rate of 23% when it is evident the tax rate is 30% is equal to the inaccurate promises of President Obama with respect to Obamacare.

If Governor Huckabee chooses to become a candidate for President of the United States, he needs to change course on his desired method of taxation. The lessons of Obamacare should not be lost to him. A key to leadership which is lost to President Obama is the ability to step away from a bad idea. Candidate Huckabee should be promoting tax simplicity as well as tax reform. He should have no desire to do to taxation what President Obama has done to healthcare.


Hank Adler

Hank Adler is an Assistant Professor at Chapman University.

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