On Taxes, Huckabee Leads

Mitt Romney, Rudy Giuliani, and, now, Mike Huckabee are the leading contenders for the Republican nomination for president. They also happen to be the only Republican candidates who have served as chief executive officers of state or local government. That means they have a record that can be assessed for how they would be likely to perform as the CEO of the federal government.

On the matter of fiscal policy, all three candidates are trying hard to show that, while in office, they cut taxes and curtailed spending. In fact, however, all three candidates have, at best, an ambiguous record on this score.

Consider Mitt Romney. As governor of Massachusetts, he averted a one-time retroactive increase in the capital gains tax and reduced property taxes paid by seniors. He also supported a holiday sales tax and business tax credits.

But Mr. Romney served only four years. Conveniently, he took office after the legislature had done much of the state's dirty work, raising taxes by more than a billion dollars to offset a falloff in revenues. It is hard to imagine that Mr. Romney would have been able to resist a similar tax increase had he taken office a year earlier. As it was, he raised fees and corporate taxes by more than $700 million on his own watch.

Of the three candidates, Rudy Giuliani did the most to cut taxes. In a report issued toward the end of his administration, the Manhattan Institute reported that Mr. Giuliani had approved city tax reductions of $3.1 billion. According to research commissioned by the Institute, these tax reductions created 80,000 new jobs.

Yet, Mr. Giuliani flip-flopped on the city's 12.5% income tax surcharge. Finally, and grudgingly, he favored its elimination. He also resisted — albeit unsuccessfully — the elimination of the city's commuter tax.

Mike Huckabee can claim credit for sponsoring tax cuts early in his administration and for championing a Property Taxpayers Bill of Rights. But the pro-business Club for Growth faults him for substantial increases in the state sales tax, motor fuels tax, and cigarette tax.

Thus, conservative voters cannot find much reassurance in the records of any of these men. At the same time, though, it is important to understand the dilemma that faces government officials at the state or local level. When the economy turns for the worse, state and local government lose money, pressuring government officials to raise taxes. All three leading Republican candidates faced this problem.

Additionally, state and local governments enjoy a great deal less autonomy than the federal government when it comes to controlling taxes and spending. Governors and mayors have to contend with judicially-mandated levels of educational spending. They also have to match federal grants for Medicaid and other programs with state dollars.

This brings us to what the candidates are saying now. Here Mr. Huckabee has the edge. Why? Because he has separated himself from the pack of leading candidates by endorsing the "FairTax," a proposed national sales tax that would take the place of almost all existing federal taxes.

There are only two questions on tax reform before the candidates in the coming election: First, do they want to reduce the burden of the existing tax code on productivity? And, second, can they promise that, if elected, they won't compromise on tax reform?

By embracing the FairTax, Mr. Huckabee has signaled that his answer to both questions is a resounding yes. And he also has done something rare for politicians: He has knowingly taken a principled stance, on which he could not waffle or compromise if nominated or elected, and which has been deemed by a number of influential pundits to be politically "unrealistic."

The FairTax gets this rap because it is a take-it-or-leave-it proposition. It is not just a vague or easily compromised promise to "flatten" the existing tax code or to "hold the line" on future taxes. It is a proposal that has been carefully crafted to raise just enough revenue to defray existing federal expenses while providing for a system of tax rebates aimed at making the tax code mildly progressive. And it removes the bias against saving that makes the existing tax code the huge burden on productivity that it is.

Voters may or may not like the FairTax. But they should understand that, by putting the FairTax in his platform, Mr. Huckabee has given them something on which they can depend, should he be elected.

This is what puts him above the rest of the field. The fact that he is advocating a policy that is defensible on its merits, though outside the political mainstream, means that he is putting principle above political expediency — a sign of genuine character. Of which the other leading candidates can the same be said?

Mr. Tuerck is the executive director of the Beacon Hill Institute, and chairman and professor of economics at Suffolk University in Boston. The Beacon Hill Institute, beaconhill.org, has performed sponsored research on the tax policies of Mayor Giuliani and on the FairTax.