What is the FairTax Plan?

What is the FairTax?

The FairTax plan is a comprehensive proposal that replaces all federal income and payroll based taxes with an integrated approach including:

* A progressive national retail sales tax.
* A prebate to ensure no American pays federal taxes on spending up to the poverty level.
* Dollar-for-dollar federal revenue neutrality.
* Repeal of the 16th Amendment through companion legislation.

Huckabee On FairTax Plan: Let's Get Rid of the Tax Man

Mike Huckabee On FairTax Plan in Michigan

Huckabee, a Baptist minister who won the Iowa caucuses backed by that state's large Christian conservative vote, has shifted his Michigan appeal to families worried about the continued economic malaise that affects the state. Referring to the state's "arsenal of democracy" legacy from World War II, Huckabee said the next president must make Michigan's woes a priority.

"There was a time in this country when Michigan saved America. Now it is time for America to help save Michigan," Huckabee told the state's economic elite. It was a potentially hostile crowd for Huckabee, who has criticized business and Republican leaders for failing to appreciate the problems of working Americans. His first ad to air in Michigan proclaims that voters want a president who doesn't remind them of "the guy who laid them off."

That rhetoric, and a record in Arkansas that includes tax and spending increases, have drawn the ire of the GOP's economic conservatives. Fred Thompson, who has bypassed Michigan but hopes to upend Huckabee in South Carolina's Jan. 19 primary, attacked Huckabee while campaigning there Friday, saying he is betraying the ideals of Ronald Reagan.

And the Club for Growth, an anti-tax, anti-spending group, is airing ads in Michigan attacking Huckabee.

He sought to defuse that criticism at the Economic Club.

"My goal is not to make rich people poor, it's to give poor people a shot at the American dream," he said.

"I am not trying to strangle business," Huckabee told reporters in a conference call after the speech. "It's my belief that the Republican Party should have policies that empower everybody from the CEO all the way down to the guy on the line."

Huckabee has been critical of the effects of international trade on American manufacturing jobs. But he said during the conference call that he supports a series of free-trade deals pending before Congress, including a treaty with South Korea that is opposed by Ford Motor Co. and Chrysler LLC.

Huckabee touted his support for a tax reform plan known to its backers as FairTax. It would replace federal income and payroll taxes with a flat sales tax, which he says would stimulate the economy by simplifying the tax code and encouraging productivity.

"He's our best chance of getting the FairTax enacted," said Roger Buchholtz, the head of the movement's Michigan chapter.

But many independent analysts say the plan's supporters understate the tax rate that would be required, and that it would benefit more wealthy taxpayers at the expense of the less well-off.