BOSCAWEN, N.H. (AP) – Republican presidential hopeful Mike Huckabee said eliminating federal income taxes in favor of a national sales tax would help save Social Security – an odd pitch in a state where residents pay no state income or sales taxes.

“Instead of basing our national budget off of payroll taxes for Social Security … it means the base of funding is much broader,” said Huckabee, whose shoestring campaign has surged nationally and in Iowa, which holds caucuses five days before New Hampshire’s Jan. 8 primary.

“That’s important because we have a declining number of people who actually live by their wages,” the former Arkansas governor told workers at the Elektrisola plant in Boscawen, where workers make wires for electric guitars like those Huckabee plays, among other things.

The tax plan Huckabee has proposed, called the “FAIR tax,” would eliminate federal income and investment taxes and replace them with a 23 percent federal sales tax. The poor would pay no net sales tax up to the poverty level, and every household would receive a rebate equal to sales taxes paid on essential goods and services.

Even the backers of the tax admit it is unlikely to get through Congress, and other leading GOP candidates have been critical of the idea. And it’s a tough sell in New Hampshire, where residents do not pay state income taxes or general sales taxes. Scott Sweezey, a programmer at the plant who lives in Bristol, said he doesn’t know how to make a consumption tax treat people fairly.

“Low-income or retired would pay the same tax as somebody who has a million dollars,” said Sweezey, an independent. “I guess if you don’t buy anything, you don’t pay any sales tax, but if you do buy something, you pay sales tax.”

A grim future looms for Social Security, because as post-World War II baby boomers begin retiring, the system won’t collect enough taxes to pay for retirement benefits. The government likely will have to raise taxes or reduce benefits.

Neither solution is attractive, so presidential candidates in both parties avoid talking about them. An exception is Republican former Tennessee Sen. Fred Thompson, who proposes lower-than-promised benefits for future retirees as well as new private investment accounts.

Huckabee says replacing income taxes with a sales tax would also have the benefit of discouraging illegal immigration because people would be forced to pay taxes they’re not paying now.

Not everyone in New Hampshire dislikes the idea of a federal sales tax.

Ken Schuhle, a Navy veteran from Dover and a registered Republican, said it would eliminate loopholes that rich people exploit. “That way, everybody pays our share,” said Schuhle, who listened to Huckabee speak during lunch at the New Hampshire Veterans Home in Tilton.

Huckabee also named Republican political strategist Ed Rollins as his national campaign chairman. Rollins was national campaign director for Ronald Reagan in the 1984 presidential election, in which Reagan won 49 states except Minnesota, Walter Mondale’s home. At a news conference in Concord, Rollins promised his candidate would work just as hard in New Hampshire as in Iowa and South Carolina, states where large numbers of evangelical Christians are increasingly choosing Huckabee.

“I think we have an obligation, both to Mike Huckabee and his people and the voters of New Hampshire, to wage a full-scale campaign here and let people make up their minds on Election Day,” Rollins said.

Independents have not yet chosen a candidate, he noted: “We’re going to make a big attempt at getting those votes, and they’ll be the last voters to make up their minds.

AP-ES-12-14-07 1633EST

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