Friday, July 2, 2010

Rick Barber's Tax Scheme

So there's this guy named Rick Barber who's running on the Republican ticket for the 2nd Congressional District in Alabama. He's already run one ad in which he practically rails at men dressed as the Founding Fathers -- in particular, Franklin and Washington -- about how bad things are today, that we have an IRS that's going to make us buy health insurance, and the gentlemen he's addressing started a war over a tea tax.

Setting aside the simplicity of the war over tea for another time, Mr. Barber was on cable television recently, trying to explain to Chris Matthews how he would structure the taxes:

BARBER: No, you wouldn’t be adding any tax.

The fair tax is a replacement for all the embedded tax that’s estimated to be in the products and goods and services that we have already because of our current income tax.
MATTHEWS: You would get rid of the sales tax in localities?

BARBER: You would get rid of Social Security, capital gains.

MATTHEWS: No, no, no.


BARBER: You would get rid of Medicare and Medicaid. You would get rid of the death tax.

All of those conservative bugbears.

BARBER: The estimated tax that’s already embedded in the goods is 23 percent. You would get rid of the embedded tax, replace it with the fair tax, and the states would then have to choose how they want to tax beyond that.
MATTHEWS: You’re talking about a George Washington character, talking about gathering an army against our own self-elected government, not the British government, not a foreign tyranny, but our own elected government.

BARBER: No, sir. No, sir.

MATTHEWS: Yes. Look --


BARBER: You’re putting those words in my ad. It says gather the army and the army we’re referring to --

MATTHEWS: Against whom?

BARBER: Gather our political army.

MATTHEWS: Oh, political army. You didn’t say that.


BARBER: Absolutely.

MATTHEWS: He’s wearing a military uniform and says gather your armies and you’re saying that’s a metaphor.

BARBER: Chris, do you know who a metaphor is? Do you know what hyperbole is?

Maybe not, but I know what patronizing is.

They finally get to something I can parse about the "fair tax":

BARBER: Here’s an example. You’ve got a Coke -- Coke today costs a dollar. Today, you pay a dollar. In that dollar are already 23 percent of taxes that we don’t see. The difference is now that Coke is going to cost 77 cents, but you’re going to see 23 percent of tax on top of that 77 cents to still yield a $1 Coke and then you add your 8 percent sales tax locally on that. There’s your correct analogy.

Ah-ha. He believes that a portion of the sticker price of every product in the store -- he claims it's 23%, I'd like to see his evidence -- consists of taxes that we don't see. Now this might make some sense if he's talking about taxes on businesses and factories, which taxes are of course passed along to us because corporations are concerned with their bottom line and not our interests as consumers. But what does he want the sticker price to be? Does he want the sticker price on that can of Coke to be $0.77? Then it certainly looks like an extra 31 cents gets added on in taxes, and that's not 23% or even 31% -- for a 77-cent can of Coke 31 cents is darn near 50%!

Or does he want the sticker price to be $1, but the receipt to print out $0.77 and $0.31 in taxes? That seems designed to get people upset about sales tax, which he would probably see as a good thing, because then they would clamor to lower sales taxes and he would look down from on high and whisper, "no." explain that we can only do that by slashing Social Security and the common welfare.

What he probably wants is for the tax burden on that can of Coke to be shifted to the consumer. He probably thinks that consumer products would be cheaper if the corporations don't have to pay taxes and fees and things, whatever goes into that 23% figure he's bruiting about, but they really won't be if you add in that tax at the point of consumption.

Oy. I hope this guy doesn't win his race.

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