(Originally published Dec. 20, 2007)
There is indeed a cult member among the frontrunners for the GOP presidential nomination. But it isn’t Mitt Romney, the Mormon from Massachusetts, despite what some in the evangelical community might tell you.
It’s Mike Huckabee, the Baptist preacher, former Arkansas governor and fervent believer in the cult of the FairTax.
For those unfamiliar with the FairTax creed, it goes something like this: Let us go forth and abolish the federal income tax, the estate tax, corporate taxes, capital gains taxes and payroll taxes, as well as the IRS. Let us then replace all those taxes with a 30 percent national sales tax collected on all services and goods, from a new house to chemotherapy treatments to a gallon of milk.
If we do that, economic heaven is within our reach.
Or, as Huckabee says, “when the FairTax becomes law, it will be like waving a magic wand releasing us from pain and unfairness.”
That does sound wonderful. Don’t we all want to be released from pain and unfairness? Don’t we all yearn for a magic wand that would bring such a glorious day to pass?
Sadly, though, there’s this little matter of reality. Reality says taxes are going to hurt, and no magic wand will ever change that. For time immemorial, taxes have been perceived as unjust, and nothing will change that either.
According to Huckabee and other proponents, the FairTax will raise just as much revenue as the current system. They also believe that, somehow, almost everyone will pay less in taxes. They believe that under the FairTax, the economy will grow at double-digit rates, interest rates will fall, exports will boom and the Falcons will win the Super Bowl.
OK, they don’t really mention the Falcons. Even the FairTax magic wand has its limitations.
In effect, the FairTax is the tax equivalent of those automobile engines designed to run on water. It sounds great, but it doesn’t have a chance of working.
The proposed 30 percent sales tax, for example, wouldn’t come close to being revenue neutral. A tax commission convened by the Bush administration found that eliminating just the federal income tax — leaving all other federal taxes intact — would require a sales tax of at least 34 percent, a finding backed by other economists.
To a cult, of course, the scorn of nonbelievers is transformed into proof that their cause is righteous; likewise, outside criticism is typically dismissed as the work of conspiracy. In this case, the FairTax cultists dismiss the findings of the Bush tax panel on grounds that it was stacked with liberals.
The FairTax cult also boasts its own holy manuscript, in this case “The FairTax Book: Saying Goodbye to the Income Tax and the IRS, ” by radio talk show host Neal Boortz and his congressional sidekick, U.S. Rep. John Linder (R-Ga.). Cultists insist that the book, like the Bible, is inerrant and answers all doubts, and that all who read it will earn enlightenment.
The fantasy nature of the FairTax is perhaps most glaring in its approach to enforcement. Advocates believe that under their system, tax fraud would essentially cease to be a problem and that the new system would almost enforce itself, allowing the IRS to fade away.
But we all know human nature. Ask yourself how many people would be lured into the black-market economy to avoid paying a sales tax of 30, 40, 50 or even 60 percent on expensive items? The FairTax cult says very few — maybe they’re counting on that magic wand again.
The grassroots fervor for the FairTax is fed by a growing and all-too-legitimate frustration among working-class and middle-class Americans, a sense that they’re working harder than ever yet losing ground every year. Huckabee isn’t shy about appealing to that frustration, not just with the FairTax but with other rhetoric as well.
However, under the FairTax, those folks would end up paying significantly more in taxes, while the tax burden for the wealthy would fall dramatically. It would victimize the very people who look to it for salvation.
The FairTax, like other cults, plays its followers for suckers.