Well the "Huckster" is at it with a pie-in-the sky promise to cut income taxes. Well, has anyone figured how much the sales tax would be on a 400,000 home or a 21,000 automobile? At 26% do the math and you add that to the cost. Will you be able to afford a home or car in the future?

If the 28% tax is gone from my income, then yes, I would be able to spend 26% more for a house or car. Note that I would be more likely to postpone getting that new car and investing the money for a few years instead -- yet another nice side effect of the proposal.

Except that

1. There is no reason for the prices to come down. So your income goes up by 28% but prices jump by 30%.
2. the jump in prices causes a reduction in consumer spending (supply demand curve) which in turn drives the economy into recession, and you lose your job.

Now #2 gets accellerated by you saving. And since "everyone" has the same idea, you get a dramatic fall in interest rates that makes your return on investment pretty much worth crap

yeah that's a nice set of "side effects"

I love the prices-will-drop-because-compa­nies-will-pay-less-taxes argument. Companies always pass along 100% of their savings to their customers rather than pocketing any of the savings -LOL.

This is Huckabee's gimme to the Republican supply-siders who are terrified that he might be a socially conservative fiscally moderate candidate (moderate in that he doesn't want to throw the poor to the dogs).

I agree. This is the Huckster's bid to keep the Catoites voting come November if he gets that far. Its not a bad plan politically because it doesn't cost him anything. Huckabee knows he will face a Dem Congress and Senate so he won't have to do anything with this tax plan, but it has an outside chance of keeping the Business Conservatives turning out to the polls. Otherwise they would take one wiff of his evangelical zeal and look at his "social justice" policy initiatives and decide to sit on their hands or maybe write in Ron Paul

# 1 This is not the 'Huskster's" plan.

#2 I assume you are not aware of embedded taxes

#3 get some facts before your next post www.fairtax.org

It is important to include imbedded taxes in our products. Right now the products we export carry with them our tax burden. Meanwhile, many countries refund taxes to companies that export to the USA. That creates a disadvantage in the prices of our exports. If embedded taxes were removed from products we export, they would be cheaper and more competitive in the global market. That would also accelerate the instream of foreign companies manufacturing the USA as well.

This blather about embedded taxes is mainly nonsense. Sure in a theoretical sense that economists love it can possibly get removed but all that does is to allow businesses to externalize costs onto the public that they have no business not paying for.

An example of this is the mileage tax that trucking companies pay for using certain roads. I live near a gravel pit. The left-turn off the local State Route that turns onto the road that leads to the gravel pit has to be repaved about every 2 years because the heavy trucks and their tandem trailers tear up even the hardest concrete that they can lay down. Why should we, the local residential tax-payers who's vehicles require a resurfacing once a decade and a repaving every 3 decades, have to absorb the cost that the gravel pit is "externalizing" onto society?

Essentially that amounts to a subsidy to the business. And we know that subsidies to businesses adversely distort the free market and encourage businesses to change their business plans in ways that take advantage of this subsidy.

So in this case, it is very clear that the added mileage tax imposed on the trucks is simply removal of a subsidy, "fair" tax economists would call this an "embedded tax".

Most of the "embedded taxes" are taxes of exactly this sort.

Most products that are the subject of these "embedded taxes" do not sell overseas or compete with overseas goods. In fact those that do, are given special subsidies to do so -effectively offsetting the "embedded tax" impact on competitiveness. Thus the "fair" tax doesn't improve international competitiveness in any meaningful way. But it DOES increase the tax burden of individual citizens.

Nor would the "fair" tax increas the instream of foreign companies manufacturing in the USA. Why? Because most other countries similarly subsidize those corporations that export into the USA. And it isn't the tax rate that limits manuracturing in the USA, it is the cost of land and labor. Since being in NAFTA would let these companies sell into the USA anyway, what you would see is an increase in MFG plants in Mexico. And in fact you DID see that for a while. But with the PRC coming on line with strong MFG capabilities, even the tax benefits of NAFTA did not offset the labor costs, so you see the MFG moving from Central America to SE Asia.

IOW, this claim that "embedded taxes" will be "fixed" by the "fair" tax. is a solution in search of a problem. It is marketing spin and nothing more. Hollow claims - also known as bullshit.