Thursday, December 9, 2010

Gingrich on the flat tax vs. Fair Tax debate (with video)

Starting in 1960, when Milton Friedman called for a flat tax, through the publication of a book devoted just to it by two Hoover Institution scholars, to Steve Forbes basing his Presidential campaigns around it, the flat tax had been the desired reform among most conservatives who wished to get away from the convoluted, wasteful, job-killing tax code.

In recent years, however, an increasing number of conservatives have pushed for the Fair Tax, which would eliminate all taxation of income and savings and replace it with a 23% national sales tax.

Personally, I think -- from a pure policy perspective -- that the Fair Tax may be the better of the two; there are some potential pitfalls with that system, though. But from a realistic perspective, the flat tax, in my opinion, is where the energy of the conservative movement should be. The worst-case scenario is that it accomplishes 90 or 95% of what the Fair Tax would. The big advantage the flat tax has is two-fold:
  1. For the Fair Tax to be implemented, and to avoid both a national sales tax and income tax, the 16th amendment would have to be repealed. The effort, even if successful, would take years and untold amounts of political capital.
  2. It is very popular right now, with a 17% optional flat tax being supported by a margin of 61-32% where only 43% support the Fair Tax.
In 2008, Newt, along with Texas Representative Michael Burgess, penned an op-ed in support of the flat tax.

Here is a video of him talking about the fair tax:

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