Here's How One Politician Would Save Michigan: Guess Who It Is?
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Mike Huckabee spoke to the Detroit Economics Club on his economic plans and brought down the house.
What's the answer to reviving Michigan's economy?
To making Michigan once more the manufacturing center of the nation?
Restructure the tax code, says Mike Huckabee, Republican Presidential candidate from Arkansas.
"Michigan saved America with its industrial might during World War II," he exclaimed. "Without Michigan we might not be sitting here today with the level of freedom we have. Now it might be time for America to save Michigan!"
The state's economic elite cheered when the previously little known Southern governor outlined specifics of his plan last week at the Detroit Economics Club.
The stuffed shirts in Detroit also responded to Huckabee's continual joking, much of it aimed at himself, interrupting him several times with applause that seemed to surprise him.
The answer to Michigan's financial woes lie in throwing out the current tax code and replacing it with what Huckabee calls the "Fair Tax."
This is a tax based on consumption recommended by a panel of economic experts from leading universities.
The plan would eliminate the IRS, end corporate and personal income taxes and wouldn't tax dividends, savings, inheritance or capital gains.
Although Huckabee didn't mention it, the Fair Tax promoted by http://www.fairtax.org website calls for a 23 percent retail sales tax on all purchases.
The site states: "The FairTax Act (HR 25, S 1025) is nonpartisan legislation. It abolishes all federal personal and corporate income taxes, gift, estate, capital gains, alternative minimum, Social Security, Medicare, and self-employment taxes and replaces them with one simple, visible, federal retail sales tax administered primarily by existing state sales tax authorities."
"I don't want to make rich people poor, I want to give the give poor people a shot at the American dream of becoming rich," he exclaimed to widespread approval. "That's how America ought to work for everyone."
Huckabee said the current tax code "picks winners and losers by manipulating the tax code." The tax code now penalizes productivity and subsidizes irresponsibility, he said.
The Fair Tax would "change the entire nature of the game," he said, creating a simple tax code in which the government doesn't pick winners and losers. He said it costs corporations and individuals about $250 billion to $500 billion a year to comply with the current tax code.
"People ask me what can ever work to make Michigan the great centerpiece of the American economy and manufacturing again," he said. "I believe it is to give a tax system that will once again revive the American spirit and create entrepreneurial drive."
Huckabee estimated that the Fair Tax would increase Gross Domestic Product (GDP) but 10.5 per cent a year, raise capital stock 42 percent, hike the labor supply 4 percent, output 12 percent and real wages 8 percent.
"No longer will there be an underground economy because everybody will be on the books," he said.
The Fair Tax likely would help attract back to the U.S. the $10 trillion "parked in offshore banks to protect it from the U.S. tax system," he said, adding: "What if that money came back as capital investment? Wouldn't it be nice to have the U.S. as a tax haven rather than a place from which companies flee?"
The former Arkansas governor noted that the nation has lost 2.4 million manufacturing jobs and that Michigan has fewer jobs than it had in 1995.
Huckabee pointed to the education system as a key to the economy, noting that 6,000 students drop out of high school every day and are therefore unemployable. He said a "bare minimum" is a K-14 education, meaning two years beyond a high school diploma.
America doesn't have a health care crisis, it has a health crisis, said the candidate, noting that the U.S. spends about 17 percent of GDP on health care. "We have a disease care system that only intervenes at the catastrophic level," he said.
He urged Michigan officials to consult the Michigan company, HealthMedia, headed by Ted Dacko, who was in the audience. Health Media, he said, helped Arkansas improve the health of state workers raising productivity by an estimated $2,300 per person.
Reducing America's health care costs to 11 percent of GDP would save about $700 billion a year, he said. "We can't continue paying people to be sick," he commented.
Founded in 1998, by Dr. Victor Strecher, HealthMedia has developed a methodology and technology that effectively emulates a health coaching session via the web.
HealthMedia contends their programs increase compliance, reduce medical utilization, and boost productivity?improving profitability for health plans, employers, pharmaceutical firms, and behavioral health organizations. ###
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