Mike Huckabee wants to abolish the IRS

Also, Huckabee calls his proposal a "fair" tax. But it's a mammoth tax cut for the crowd making more than $200,000 a year and a substantial tax increase for those making between $30,000 and $200,000 a year. Does this make economic sense? It is hard to see how: What makes the $200,000-plus crowd especially deserving of a tax cut? This is part of a pattern with Huckabee. Anxious to distinguish himself on policies from his competitors but without the staff and the network to perform due diligence on policy proposals, he ends up with ideas that aren't fully worked out and don't make much substantive policy sense.

Does the FairTax make political sense? It is hard to see how -- at least not if people know what he is really proposing. After all, a lot more people make between $30,000 and $200,000 a year than make more than $200,000. Politicians prefer, other things being equal, to take positions that are advantageous to more people rather than those that are advantageous to fewer.

So why is Huckabee doing this?

I believe the reason is that he is counting on people not knowing what he is really promising. I believe he is counting on the nigh total fecklessness of America's press corps -- a fecklessness that I at least now see as deployed with a sharp partisan edge. As economist John Irons laments on his blog, ArgMax.com: "I'm not sure how he is getting away with adopting the FairTax as part of his platform. Wouldn't Democrats be skewered in the media if they proposed a tax increase on people making between $30,000 and $200,000?" Yes.

But Huckabee is a Republican. And it is different if you are a Republican. The New York Times in its big Huckabee profile by Zev Chafets said:

Huckabee's answer to his opponents on the fiscal right has been his Fair Tax proposal ... Governor Huckabee promises that this plan would be "like waving a magic wand, releasing us from pain and unfairness." Some reputable economists think the scheme is practicable. Many others regard it as fanciful ... In any case, the Fair Tax proposal is based on extremely complex projections.

And that's all the crack journalism of the New York Times has to say. If you are seeking information in a daily newspaper, look elsewhere -- I recommend the Financial Times.

Since America's mainstream press believes that it cannot talk about the substance of policy, about who actually would gain and who would lose from a shift to a national sales tax -- that, you see, depends on "extremely complex projections" -- the only point to grab onto when talking about the national sales tax is that it eliminates the IRS. And that sounds very good. And sounding very good is what Huckabee is counting on.

But what replaces the IRS? What agency administers a national sales tax. Conservative economist and former George H.W. Bush administration official Bruce Bartlett fears the:

incredible complexity and intrusiveness of tracking every American's monthly income [for the rebate program] ... massive technical and administrative problems with collecting all federal taxes at the checkout counter and relying entirely on state governments to collect the federal government's revenue ... What is to stop [states] from slacking off [sales tax enforcement] and giving their citizens a tax cut at federal expense?

Thus this FairTax selling point is bogus too. The FairTax doesn't eliminate the IRS. It replaces the IRS with another agency -- the United States Fair Tax Federal Revenue Administration and State Tax Authority Reconciliation Service, or the USFTFRASTARS. It is true that the USFTFRASTARS doesn't audit individuals -- it audits businesses and state governments instead. This is a good thing for the $200,000-plus crowd: They are the ones who get audited, and so they get both a big tax cut and greatly increased peace of mind. But this is not a good thing for everybody else. The administrative and enforcement burden does not go away but, rather, becomes even more complicated.

Is Huckabee's FairTax smoke and mirrors? Yes. Is it voodoo economics? Yes. But remember one more thing: It is more reality based than the proposals of the establishment Republican candidates.

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