A 'yes, we can' plan with beef

Star Parker
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Posted: Feb 25, 2008 12:00 AM
A 'yes, we can' plan with beef

With the wide public sympathy today for "cleaning up Washington," it's too bad that more attention hasn't been given to Mike Huckabee's "Fair Tax" proposal.

There is no perfectly constructed tax, and this idea, like all, has its critics. But it also has huge benefits relevant to today's concerns and warrants much more serious attention than it's getting.

The proposal would get rid of all existing taxes -- the income tax on individuals and corporations, the payroll tax, the estate (death) tax -- and replace them with a single national retail sales tax. Fair Tax proponents say that it would take a sales tax of 23 percent to meet current obligations.

Enactment of such a tax would be accompanied by repeal of the 16th Amendment, which was ratified in 1913 and made it possible for Congress to tax income.

Most probably are not even aware that the Constitution had to be amended to make an income tax possible, and that this did not occur until the beginning of the last century.

It's also worth noting that, in the early part of the last century, most tax revenue occurred at the state and local rather than the federal level. Shortly before enactment of the federal income tax, federal taxes accounted for just 3 percent of the nation's GDP. Today they account for close to 20 percent.

Economists can argue cause and effect. I'll just point out that as soon as we enacted the income tax, growth of the federal government took off and outstripped state and local spending as the major tax burden on citizens.

The income tax, with its 45,000 pages of tax code, is now simply a sandbox for politicians and lobbyists to play in. This is what we should focus on in all the discussion about special interests, lobbyist influence and runaway growth in government.

With a national retail sales tax to finance government, the tax burden on citizens would be totally transparent. Whenever you make a purchase and look at the sales slip, you'd see the 23 percent tax and know that's what you are paying for the federal government and its programs.

When a Sen. Smith or a Congressman Jones shepherds some new program through Congress and the president signs it into law -- ka-ching! -- we'd immediately see it at the cash register. When you ask the cashier why you are now paying 24 percent instead of 23 percent, he or she can explain that you are paying for some wonderful new government program.

Anyone who has been around Washington for a while knows that it is next to impossible to get a 1 cent increase in the federal gasoline tax passed. Despite a consensus that we should dampen our consumption of gasoline, no politician wants to take credit for transparently raising a retail sales tax.

Consider the impact on special interests.

Most of those 45,000 pages of the tax code reflect special treatments and deductions for businesses, particular types of investment, or behavior. This stuff got in there and regularly gets modified and changed as a result of various special interests working their magic.

The number of registered lobbyists in Washington doubled over the last eight years from 17,000 to over 34,000. A good chunk of their business is generated by proposed additions or changes to the tax code.

If you listen to Sens. Barack Obama and Hillary Rodham Clinton, with all the talk of reducing lobbyists' influence, most of their pitch is using the tax code for their social engineering programs.

I say get rid of the code, the Internal Revenue Service and the lobbyists.

Ironically, the major reason why the national retail sales tax gets so little attention is because insiders deem it politically impossible to achieve. Those who are part of the problem don't want the solution. The tax code is now one huge special-interest honey pot and the swarming bees want to keep it that way.

The best reply to this challenge came from the Republicans' own "yes, we can" man, Mike Huckabee.

When NBC's Tim Russert challenged Huckabee on the political likelihood of the Fair Tax, Huckabee's response was:

"... Tim, ... everybody talks about how unlikely these things are. That's what's wrong in America. We're always talking about what we can't do."

Are we really at the point where major reforms are no longer possible in this country?

Republicans ought to get behind this "yes, we can" plan with beef.