During his unsuccessful campaign for the Republican presidential nomination, former Arkansas Governor Mike Huckabee was a vocal supporter of the fair tax, a plan which would abolish the Internal Revenue Service and replace the federal income tax and most other federal taxes with a 30 percent sales tax.
According to the Atlanta Journal-Constitution, Huckabee was in Georgia last weekend to support Sen. Saxby Chambliss (R-GA), another fair tax advocate, who is headed into a December 2nd run-off election with challenger Jim Martin. Huckabee “joined about 2,000 people Sunday afternoon at the Gwinnett Civic Center in what became not just a fair-tax rally, but a major campaign stop”:
“This race is our best chance to keep the fires burning for the fair tax,” said Huckabee. “And we are not going to squander this opportunity.”
Tax experts believe that a sales tax above around 10 percent is impossible to enforce because the incentives for cheating are so great. The fair tax would impose a 30 percent sales tax — so high that it would no doubt begin a cycle of black-market sales, resulting in escalating rates to capture the lost revenue, resulting in even more cheating, to the point of total collapse.
Even if the system was sustainable, as Megan McArdle pointed out “It will end up being quite regressive, with the highest effective burden falling on the lower tiers of the middle class.”
The American tax code is, admittedly, a mess, and one that actively encourages income disparity. However, enacting a cockamamie scheme that entirely scraps the current system would just make matters worse. Instead — as explained in Change for America — the U.S. needs to find its way back to a more progressive tax code that helps build “a sustainable, inclusive economy that benefits all.”