I can’t decide if Blanche Lincoln keeps saying “23-percent sales tax” because she wants her statement to match the face of John Boozman’s proposed bill (and thus preempt any pro-Boozman whining about how the tax is “only” twenty-three percent) or because she honestly doesn’t understand that the “23 percent” figure is mathematically dishonest. Given how she routinely assumed that voters were blithering idiots during the primary season, I’m tempted to assume it’s the latter, but, then, I’m not the world’s biggest Lincoln fan,1 and I might be biased.
As explained by pretty much anyone who has taken the time to do the math, it works like this: On its face, Boozman’s proposed tax would take a product that cost $100, slap $30 in tax on it, then point out that $30 is roughly 23% of $130. Except, as anyone with a rudimentary understanding of accounting would tell you, that’s not what people actually mean when they talk about a sales tax. Rather, the percentage that you, your aunt Martha2, or I are talking about when we discuss a sales tax is the pre-tax percentage. Which, in the above example, is a 30% tax.
But, honestly, even the 30% figure isn’t exactly right. As Ernest Dumas noted and FactCheck.org explained, the actual number is closer to 34%.
We wrote that the bipartisan Advisory Panel on Tax Reform had “calculated that a sales tax would have to be set at 34 percent of retail sales prices to bring in the same revenue as the taxes it would replace, meaning that an automobile with a retail price of $10,000 would cost $13,400 including the new sales tax.” A number of readers pointed out that H.R. 25, the specific bill mentioned by Gov. Huckabee, calls for a 23 percent retail sales tax and not the 34 percent used by the Advisory Panel on Tax Reform. That 23 percent number, however, is misleading and based on some extremely optimistic assumptions. We found that while there are several good economic arguments for the FairTax, unless you earn more than $200,000 per year, fairness is not one of them.
If Lincoln went with the “23%” figure to avoid any confusion and whining from the GOP side, then I suppose I understand the rationale. If she did it because all she did was read the bill and did not spend the three seconds necessary to interpret the meaning of “23-percent (of the tax-inclusive sales price) sales tax,” then that’s not the kind of attention to detail that I’d like to see from someone seeking my vote. Either way, though, my bigger beef is this: along with Joyce Elliott horrid commercial, Democrats continue to pump out ads that, at minimum, leave all sorts of stuff on the table and do not seem likely to make a dent in the sizable leads their respective GOP candidates hold. Is it too much to ask that someone put out something that doesn’t leave me feeling like Carl Brutananadilewski?
1 That’s what the English majors in the crowd call “an understatement.”
2 Who you really should call.