Gov. Mark Sanford is a Good Man
It takes guts for a Republican governor to stand up and say there is something important about the Obama candidacy. Thank you governor.
Entries for January 12th, 2008
President Bush Crying!
According to some people no man should allowed to be President because ol’ George cried at the Holocaust memorial.
Fair Tax Manipulators
So Brian loves the headline “Huckabee’s Tax Plan is Brilliant (So Why is it Getting Trashed)”…wow, I’m shocked, but he should actually read the article.
The conclusion is this:
But the good news is that the details don’t matter, because there’s an easier way to design a graduated sales tax. Namely, keep the graduated income tax and add a provision for unlimited IRAs. Presto, you’ve got the equivalent of a graduated sales tax.
That’s not necessarily desirable. You could well argue that a flat tax rate is a feature, not a bug. But that’s a topic for a different column. The point of this column is that the whole flat-versus-graduated issue is quite tangential to the sales-versus-income-tax issue. And the underlying issue becomes a lot clearer once you realize that a sales tax is a modified income tax. The right question is: Is the proposed modification a good one? The answer, according to a growing consensus among macroeconomists, is: Yes.
I think a modified income tax that includes a liberalized IRA policy is much more palatable than a national sales tax, even if the effects are equivalent. The biggest issue I have with the fair tax is the fact that Alabama is already so dependent on the sales tax that you would be asking a poor citizen in Alabama to pay $33 in tax on a $100 purchase. That just isn’t going to work, no matter how you incentivize it.