Huckabee: Fair Tax ‘Takes the Power’ from Congress, Gives It to People
WALLACE: "OK. Let’s talk about the fair tax which you just brought up. You want to abolish the income tax, you want to abolish the IRS and create a fair tax, as you say, is a national sales tax. But critics say the problem with that is it’s too regressive. The Tax Policy Center said this, that the average rate for the lowest income group would exceed 33 percent, while the average for the top group would fall to less than 16 percent. The argument, Governor, is that the rich who spend less of their income are going to end up making out pretty well under this. And the poor who spend almost all their income and are going to be paying this sales tax are going to pay the most, or at least the highest percentage."
HUCKABEE: "They have it exactly wrong. In fact, it’s the bottom third of the economy who benefit the most from the fair tax. The people of the top third of the economy benefit the least, although everybody benefits some. That tax study is one that has been discredited by the people who spend over $20 million, very thorough, thoughtful economic study developing the fair tax. It’s not just some political idea. It’s a thoughtfully presented economic plan --" [crosstalk]
WALLACE: "Doesn’t it just stand to reason if I make $5,000, I’m going to spend a higher percentage of my income just for the necessities, and if I make $1 million, I probably am not going to spend as much a percentage of my income because I’ve got a lot of income."
HUCKABEE: "Well, the difference is, though, and this is where a lot of people don’t understand, the fair tax has what’s called the prebate, which untaxes people for their necessities. So, if you’re at the bottom third, chances are you really don’t pay any effective tax whatsoever in the consumption tax because you are consuming less and you’re getting a prebate, which is a rebate in advance for that what you would have spent. So, that’s why the poorest people end up coming out better. I would recommend people going to the fair tax Web site, reading books on the fair tax, but getting it from people who actually know what it does rather than those who don’t want to see the fair tax. Because I’ll tell you what the fair tax does, it empowers the consumer and it lets people have their whole paycheck and it takes the power out of the hands of Congress and puts it in the hands of the consumer. That’s power to the people."