On income taxes, Huckabee and Foxx align
By Bertrand M. Gutiérrez, Winston-Salem Journal
Washington, October 29, 2015
Tags: Budget and Tax Reform
U.S. Rep. Virginia Foxx, R-5th, is more in line with former Gov. Mike Huckabee of Arkansas on the subject of federal income taxes than any of the other Republican presidential candidates who participated in the CNBC-moderated debate Wednesday.
As it turns out, Huckabee walks alone among his GOP rivals, though his income-tax proposal reflects a similar proposal co-sponsored by 72 Republicans in the U.S. House.
Huckabee is the only candidate in the debate so far who proposes replacing the federal tax on ordinary income with a sales tax. The other GOP candidates at the debate who have disclosed an income-tax policy prefer one of two types of tax on ordinary income: either a flat tax or a bracketed tax structure.
Supporting a bracketed tax structure are former Gov. Jeb Bush of Florida, Gov. Chris Christie of New Jersey, Gov. John Kasich of Ohio, U.S. Sen. Marco Rubio of Florida and New York tycoon Donald Trump, according to the Tax Foundation, a nonpartisan research organization based in Washington. The bracketed tax structure is currently in place.
Supporting a flat tax are Dr. Ben Carson, U.S. Sen. Ted Cruz of Texas and U.S. Sen. Rand Paul of Kentucky, according to the foundation.
Carly Fiorina, the former chief executive of Hewlett-Packard, has not disclosed how she would tax ordinary income, according to the foundation.
For his part, Huckabee’s plan would eliminate the individual income tax and create a federal sales tax at a rate of 23 percent, with monthly rebates for low-income households, according to the foundation.
“This proposal is often referred to as the Fair Tax, and is equivalent to a rate of 30 percent on the pretax price of goods and services,” the foundation said in an analysis of Huckabee’s proposal. He would also eliminate the tax on capital gains and dividend income, as well as the corporate income tax and estate taxes.
For years, Foxx — whose 5th Congressional District includes most of Winston-Salem and a large portion of Northwest North Carolina — has supported such a tax proposal. Asked what type of tax on ordinary income Foxx prefers, Sheridan Watson, a Foxx spokeswoman, said, “Since 2009, Congresswoman Foxx has co-sponsored the Fair Tax Act.”
The bill, known as HR 25, has 72 co-sponsors.
Of the House members representing North Carolina, U.S. Rep. Mark Meadows, R-11th, was also a co-sponsor.
The sales tax would stand in lieu of income and corporate income taxes, employment and self-employment taxes, and estate and gift taxes, according to the bill summary. The rate would be 23 percent in 2017, according to the bill. Family members “who are lawful U.S. residents receive a monthly sales tax rebate … based upon criteria related to family size and poverty guidelines,” according to the bill.
U.S. Rep. Mark Walker — a Republican whose 6th Congressional District includes Surry County, Stokes County, Greensboro and runs east through part of Granville County — declined to choose a preference among the three tax systems.
“The complexity of our tax code is overwhelming to individuals and companies alike,” Walker spokesman Kyle Hall said.
“It continues to be manipulated by lobbyists who create loopholes for corporations that abuse the system. Small businesses and private citizens are forced to carry a greater burden because of the flawed system,” Hall said.
“With over 70,000 pages of tax code and regulation, Rep. Walker prefers a dramatically simplified tax code and sees merit in flat tax, fair tax, and bracketed tax models,” he said.
U.S. Sen. Richard Burr has supported the Fair Tax Act, according to his aides. Unlike Foxx, he is not a co-sponsor of the bill’s version in the Senate. Burr “is open to examining different reform ideas that would simplify the tax code to make it more fair by closing existing loopholes,” spokeswoman Becca Watkins said.
U.S. Sen. Thom Tillis’ office could not be reached for comment.
The Fair Tax Act bill has been referred to the U.S. House Committee on Ways and Means.