Mike Huckabee on the Issues-Taxes and the Economy

taken From Mike Huckabee issues page

  • I support the FairTax.
  • As Governor of Arkansas, I cut taxes and fees almost 100 times, saving the taxpayers almost $380 million. I left a surplus of nearly $850 million, which I urged should go back to the people.
  • Our massive deficit is not due to Americans’ being under-taxed, but to the government’s over-spending.
  • To control spending, I believe the President should have the line-item veto.
  • I believe in free trade, but it has to be fair trade.
  • Globalization, done right, done fairly, can be the equivalent of a big pay raise by allowing us to buy things more cheaply.

I’d like you to join me at the best “Going Out of Business” sale I can imagine – one held by the Internal Revenue Service. Am I running for president to shut down the federal government? Not exactly. But I am running to completely eliminate all federal income and payroll taxes. And do I mean all – personal federal, corporate federal, gift, estate, capital gains, alternative minimum, Social Security, Medicare, self-employment. All our hours filling out forms, all our payments for help with those forms, all our shopping bags filled with disorganized receipts, all our headaches and heartburn from tax stress will vanish. Instead we will have the FairTax, a simple tax based on wealth. When the FairTax becomes law, it will be like waving a magic wand releasing us from pain and unfairness.

The FairTax will replace the Internal Revenue Code with a consumption tax, like the taxes on retail sales forty-five states and the District of Columbia have now. All of us will get a monthly rebate that will reimburse us for taxes on purchases up to the poverty line, so that we’re not taxed on necessities. That means people below the poverty line won’t be taxed at all. We’ll be taxed on what we decide to buy, not what we happen to earn. We won’t be taxed on what we choose to save or the interest those savings earn. The tax will apply only to new goods, so we can reduce our taxes further by buying a used car or computer.

Our current progressive tax system penalizes us for working harder and becoming more successful. As we climb the ladder, the government lurks on each rung, hungry for a bigger bite out of our earnings. The FairTax is also progressive, but it doesn’t punish the American dream of success, or the old-fashioned virtues of hard work and thrift, it rewards and encourages them. The FairTax isn’t intended to raise any more or less money for the federal government to spend – it is revenue neutral.

Expert analyses have shown that the FairTax lowers the lifetime tax burden of all of us: single or married; working or retired; rich, poor or middle class.

The FairTax will instantly make American products 12 to 25% more competitive because the cost of those goods will no longer be inflated by corporate taxes, costs of tax compliance, and Social Security matching payments. When we buy products now, those taxes are built into the cost, so all of us pay corporate taxes indirectly on top of the personal taxes we pay directly. Compliance costs are just make-work with no real added value, yet they consume as much as 3% of our gross domestic product annually. These costs are an especially heavy burden on small businesses, which generate most of our jobs.

If you buy a bottle of domestic wine, you’re paying the taxes/compliance/matching payments of all the folks who produced the grapes, the wine, the bottle, the cork, the label. If you buy a bottle of French wine, the producers had their Value Added Tax rebated to them when the wine was exported. So French consumers pay those taxes, but you don’t. Our current tax system puts our goods at a disadvantage both here and overseas. Other governments give their goods an advantage on the world market, an advantage estimated at 18% compared to American goods.

So no matter how hard Americans work, no matter how innovative and creative we are, no matter how superior our products are, we suffer from a built-in competitive disadvantage simply because of our tax system. A recent study by MIT found that our tax system deprives us of about $1 billion in exports annually. When you export over-priced goods as we have, you inevitably end up exporting jobs and industries as we now are. We are the square peg trying to fit into the round hole of international trade. The rest of the world isn’t going to change, it’s time that we do.

Under the FairTax, American companies are far less likely to move overseas and foreign companies are far more likely to come here, hiring Americans to build and work in their new plants. The FairTax encourages growth by promoting investment and capital formation.

We have to scrap a 20th century tax system that is holding us back and keeping us down in the 21st century. The FairTax is the path to greater prosperity and job security for us and for our children.

As Governor of Arkansas, I pushed through the Arkansas Legislature the first major, broad-based tax cuts in state history – a $90 million tax relief package for Arkansas families. I also doubled the standard deduction to $2,000 for single taxpayers and $4,000 for those who are married. Some taxes I eliminated entirely: the marriage penalty, bracket creep caused by inflation, income tax on poor families, and capital gains on home sales. To encourage investment, I cut capital gains for both individuals and businesses. To help people better themselves, I provided tax credits for employee training and education. In total, I cut taxes and fees nearly 100 times during my ten-and-a-half years as Governor, saving the people of Arkansas almost $380 million.

When I left office in early 2007, Arkansas had nearly $850 million in state surplus, which I urged should go back to the people in the form of either a tax rebate or tax cut.

I believe that our massive deficit is not due to Americans’ being under-taxed, but due to the federal government’s over-spending. Achieving and maintaining a balanced federal budget is an important and worthy goal necessary to our long-term economic well-being. To achieve a balanced federal budget, I believe the President should have the line-item veto.

I believe in free trade, but it has to be fair trade. We are losing jobs because of an unlevel, unfair trading arena that has to be fixed. Behind the statistics, there are real families and real lives and real pain. I’m running for President because I don’t want people who have worked loyally for a company for twenty or thirty years to walk in one morning and be handed a pink slip and be told, “I’m sorry, but everything you spent your life working for is no longer here.”

I believe that globalization, done right, done fairly, can be a blessing for our society. As the Industrial Revolution raised living standards by allowing ordinary people to buy mass-produced goods that previously only the rich could afford, so globalization gives all of us the equivalent of a big pay raise by letting us buy all kinds of things from clothing to computers to TVs much more inexpensively.

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