TRANSCRIPT: The Republican Debate

I served in Vietnam -- didn't do anything special, but I wore the uniform. I've been the chairman of the Armed Services Committee for the last four years. And my son has now done two tours in Iraq and one in Afghanistan. I can look the American people in the eye and say, "We're all in this together."

So I would not share the role of commander in chief with a vice president. If you've got other folks that have less background in national security, they're going to need to have a vice president that they rely on much more.

STEPHANOPOULOS: I need to move on now, and the issue is taxes, always important in these caucuses and primaries.

And the Iowa Republican Party has said the most important economic reform Congress can enact to win the fight against poverty is the fair tax.

For our viewers, I want to explain what the fair tax is. It would eliminate the income tax, estate tax, payroll tax and capital gains tax. It would eliminate all those and replace it with a 23 percent sales tax. That's the fair tax.

(APPLAUSE)

Mr. Yepsen has a question.

YEPSEN: Governor Huckabee, this issue of tax policy, I see it as a real fault line inside your party -- fair tax, national sales tax, a flat tax, or make adjustments to the existing tax system.

YEPSEN: Where do you come down on this question?

HUCKABEE: I absolutely support the fair tax. And part of the reason is, the current system is one that penalizes productivity.

A recent poll showed that more Americans fear an audit of the IRS than they do getting mugged. And the reason is, getting mugged isn't as painless as an audit from the IRS.

(LAUGHTER)

And the reality is, if we could have the fair tax, you take $10 trillion parked offshore, bring it home, you rebuild the "made in America" brand, you free up people to earn money, to work, you don't penalize them for taking a second job, you don't penalize them for investing, you don't penalize them for savings.

Today, our tax system doesn't need a tap of the hammer, a twist of the screwdriver, it needs a complete overhaul. And what the fair tax does, it ends the underground economy. No more illegals...

YEPSEN: Governor Romney?

HUCKABEE: Let me, if I may.

No more illegals, no more gamblers, prostitutes, pimps and dope dealers will be able to escape the tax code.

YEPSEN: Governor Romney?

HUCKABEE: It's the single great thing that will help this country (inaudible) revitalized economy.

(APPLAUSE)

YEPSEN: Governor Romney, how do you come down on this question?

ROMNEY: It's good, but it's not that good.

HUCKABEE: No, it's actually better than that, Mitt, it's even better than that.

(APPLAUSE)

ROMNEY: There are a lot of features that are very attractive about a fair tax. Getting rid of the IRS is something we'd all love. But the truth is, we're going to have to pay taxes.

We are the largest economy in the world. We've added -- during the time Europe added 3 million jobs, we've added about 50 million jobs in this country.

And so completely throwing out our tax system and coming up with an entirely new one is something we have to do very, very carefully.

The president's commission on taxation -- tax reform -- looked at this and said: Not a good idea.

Some of the reasons...

HUCKABEE: They didn't look at that...

(CROSSTALK)

ROMNEY: Let me -- hold on, let me complete.

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