As I noted in an earlier post, Mike Huckabee’s tax plan is, plain and simple, nuts. It’s remarkably regressive and doesn’t even remotely add up. It makes the GW Bush tax cuts look like a model of carefully crafted and responsible policy analysis.
That said, I think it’s important to note that I think Huckabee may be misguided rather than malevolent. As Jon Chait noted in a recent bloggingheads discussion, there simply isn’t much by way of policy apparatus for someone attempting to position themselves as a non-plutocratic Republican, leaving Huckabee to sort of grab at whatever was being pitched to him (yes, this is the REALLY generous interpretation). I think it’s also the case that Huckabee doesn’t have a highly analytic mind, which, by the way, is a terrible characteristic in a future president.
So the question is, what would someone who knew what they were talking about recommend to a candidate who says the sorts of things that Huckabee does about what he wants? Not to sound like a broken record, but I would recommend that RBC readers take a look at a post I wrote a little while ago, singing the praises of Yale Law professor Michael Graetz’s tax reform proposal. It does some of what Huckabee proposes, replacing much of our income tax with a value added tax, but at a level that would actually be feasible (somewhere between 10-14%). Using the proceeds of the VAT, he would eliminate the income tax for those with incomes under $100k. (there are more aspects of his proposal that needn’t worry us here, but that are well worth our readers digging into)
From Huckabee’s political point of view, this would allow him to do what is really most important to him, at least rhetorically–eliminate the income tax for most Americans. In addition, by isolating the nation’s tax subsidy regime to those in higher incomes, Graetz’s plan would render this lobbyist’s playground more vulnerable, which would also have some populist punch to it.
By the way, in my judgment Barack Obama would be well-advised to adopt the Graetz plan as his own. If he combined this with a large carbon tax (or something similar) to control global warming, and used the proceeds to pay for universal health care, he’d have a very ambitious domestic agenda that would make it a bit clearer what he wants us to hope FOR. More details on this to come…