Saturday, April 9, 2011

No Apology: Fair Tax

Mitt Romney's book does not seek to settle the score with anyone. Neither is the book about Mitt Romney. I have been somewhat surprise by what an "adult" book it has been.

I couldn't help but think of this when I was reading Romney's section on tax policy. He devotes two pages to the fair tax. Yet, there is one person's name who never comes up -- Mike Huckabee. The Right Speak community may remember how Huckabee gave two pages in his recent book to lying about "Romneycare." And when I say lying, I mean lying. Huckabee misuses data in an attempt to blame historically rising premiums on "Romneycare." He, of course, refers to it as "socialized medicine." Huck cites two articles as his sources. When I read Huck's section about "Romneycare," I couldn't help but get the sense that the talk show host is doing everything he can to poke his finger in the eye of the man who hurt his feelings in 2008.

In contrast to Huckabee, Romney conducts actual research (again, it's an adult book; this will be the subject of a future post). He doesn't prefer the fair tax. But for intelligent people, public policy often leads to nuance. Which is why Romney ends his long discussion with this (145):
It would be instructive if we could give the fair tax a fair test, but that would be difficult. In concept, the idea of a consumption tax is very appealing because of its potential to propel economic growth, but there are a number of potential drawbacks that will have to be worked out. At a minimum, the fair tax would have to be structured to avoid the windfall for the very rich and the extra burden which would fall on the middle class. 
There is a lot of thoughtful nuance in No Apology.

14 comments:

DanL said...

I may have to check my library now to see if they have a copy of No Apology. I am curious to read what else Romney had to say on the fair tax. Problem is that my city isn't very big and the library is also not large.

Pablo said...

Dan, it really is worth your time reading. Before I started reading it, I was very pessimistic. I thought it would be about 50% policy, and 50% pander. It has been about 90% policy, and 10% pander. You will learn a lot about issues that actual matter.

As far as the fair tax --

Romney believes that the 23% that fair tax proponents believe would be sufficient to make up for the income tax is bogus. He believes that the rate would be much higher.

Romney says that even though the IRS would be eliminated, it would have to be replace with a government agency of some kind that would insure that people are not bartering or finding other means to avoid paying taxes. The IRS would be replaced with something that is similar to the IRS. Calling for the elimination of the IRS is music to people's ears, but it is not realistic.

Romney also says that the taxes of the very rich would go down, which would significantly lower federal revenue. He uses a very good example of Bill Gates in explaining this concept.

Romney argues that the fair tax would boost savings, but it's effect on consumption is less certain. Again, he goes into a long explanation of why.

Pablo said...

Dan,

Romney has some excellent chapters on health care, education, and energy that are some of the most well researched and thoughtful explanations of those issues. Again, the book is not light reading. There are graphs and there are lots of numbers. The average American would not make it past the first chapter due to boredom.

Right Wingnut said...
This comment has been removed by the author.
Seeker said...

Fairtax sounds great, but it's goofy and no serious candidate would support it.

http://fairtaxfineprint.blogspot.com/

Anonymous said...

Pablo, Im very interested in his book, but im a lazy reader, i look forward to your review on each issue and romneys opinions/plans for it. Thanks

DanL said...

I agree that it is a pipe dream to think that the IRS could be eliminated without replacing them with an equally burdensome beuracracy. I also think that taxing new merchandise with a burdensome sales tax would drive retailers out of business and that would drive producers out of business. A nation cannot sustain itself on reused items indefinately.

Dave said...

I support the FairTax, and I support Romney. Mitt is sympathetic to it, but is rightly convinced that it would be a tax increase on the Middle Class for awhile.

Longer term, it would generate so much economic growth that it would benefit everyone.

My solution is to make the proposal tax neutral for the Middle Class to begin, and let employers keep more of their money. Since investment would be massively incentivized by the FairTax, growth, particularly in exports, would benefit everyone.

Anonymous said...

Might I suggest to the lazy readers (or those with little time for sit-down reading) who nonetheless want to plow through Romney's policy book to purchase it on cd? I got mine for around 10 on Amazon, and finished it around 2 weeks just driving in my car. Also hearing it read by the former governor himself was a pleasing experience.
MikeZ

Anonymous said...

On the fair tax,
First off, 23% is plenty government needs to limit spending. Second, we dont to replace the IRS With anti-bartering police. That is what is silly.

andieclark said...

There isn't a single plan I've heard about reforming the tax policy that was not met with formidable level of resistance, establishing that challenge one of the most difficult problems going through America now. But I consider most of us can certainly reach a decision that it needs reform. Although people in politics inform us they've kept our taxes reduced federally, state government legislatures (from each side) happen to be finding newer methods of making up the decrease in revenue. Exactly how imaginative is your state? http://www.tax-defense-network-tax-laws.com/tax-defense-network-top-10-silly-tax-laws

Stew said...

If I may add andieclark, if you are encountering a tax debt from the Internal Revenue Service, you will encounter numerous letters that will be delivered from the Internal Revenue Service to keep you educated. http://www.tax-defense-network-cpnotices.com/cp-notice/back-tax-letters/ helps you recognize what the letters indicate and where to start once they arrive in your mailbox.

Anonymous said...

Has anyone on this post read The Fair Tax?

Therence Sim said...

Tax Defense Network states the goal of a PPIA is to allow taxpayers with some ability to pay their tax debt an IRS program that they could benefit from.