Huckabee – Ignorant or an Outright Liar?

The title is a bit much but the question is accurate. It is highly improbable that Mr. Huckabee prepared his tax program based on a consumption tax. It is a bit unnerving that a man who heralds himself as a man of the working class would support a fiscal program that would significantly reduce taxes on the UberRich and significantly increase taxes on those who have lost their jobs, are retired or are in the lower tax brackets. Mr. Huckabee touts his plan saying that European countries have an unfair tax advantage because they do not pay Ad Valorum Tax on goods shipped outside their country of origin.

Mr. Huckabee then goes on to explain that America needs to eliminate Federal Taxes and take on the European Ad Valorum tax. This would make America competitive. Unfortunately, by supporting this argument, Mr. Huckabee is either ignorant of tax structure or is a real snake hiding in the cloth of his religion.

The Ad Valorum tax, in Europe 20%, is sales tax. Each country also has the equivalent of Federal taxes that increase based on how much one earns. Each country has a different scale but they are generally inline with US tax scales.

Mr. Huckabee is not talking about a “Flat Tax” instead he is suggesting a consumption tax. A Flat Tax would be a fixed percentage on all income including capital gains. A Flat Tax would eliminate all deductions and loopholes. A Consumption Tax would exonerate all income from taxation that is not spent. Supporters say this would encourage saving since all interest would be tax free. All capital gains would be tax free. The unforeseen consequences include decreasing investments in start up or small businesses since there would be no way to offset the losses. To offset the increased burden on the lower and middle class citizens the government would cut a monthly check reimbursing the individual for taxes. I do not think this statement requires any additional comment.

The thing that caught my attention about this program is the hypocrisy of Mr. Huckabee. He first states that he wants to give America back to Americans and then proposes tax policy that would significantly burden the lower and middle class (more than 75% of Americans) and reduce investments in small businesses. Small businesses are the main source of new jobs. Unfortunately this is just another example that what politicians say has little to do with what they intend to do.