Mike Huckabee: Friend or Foe of Business?

As he moves into the top tier of GOP presidential candidates, the former Arkansas governor is attracting more scrutiny.

By Richard Sammon, Senior Associate Editor, The Kiplinger Letter

December 13, 2007

Would a Mike Huckabee administration be good for business? More Republicans are asking, now that the former Arkansas governor has become the GOP favorite in the Iowa presidential caucuses that take place Jan. 3.

A dark horse only weeks ago, Huckabee has suddenly taken a big lead in Iowa, and polls show him gaining rapidly among Republican voters around the country. He strikes a chord with religious and socially conservative voters who aren't happy with any of the other GOP contenders. But now, his better-financed and better-organized opponents are striking back, and Huckabee's bid could easily be derailed as the scrutiny and criticism mount.

For businesses, the Huckabee record is mixed -- and his positions, still changing. He once expressed support for a guest worker program similar to the one backed by President Bush and fellow presidential aspirant Sen. John McCain. And as governor of Arkansas, he supported a bill giving education breaks to the children of illegal immigrants.

But now Huckabee is taking a much stronger stance against illegal immigration. His campaign issued a policy statement this month calling for building a fence along the southwestern border by the summer of 2010. Huckabee also wants undocumented workers to register with U.S. immigration offices, return to their country of origin and apply for citizenship through normal channels or face deportation. He also supports a ban to keep illegal immigrants from reentering the U.S. for 10 years. In addition, he says he backs "steep fines and penalties" for employers of illegal workers and a mandatory citizenship verification system as part of the hiring process.

Business groups will sound alarms. Most of them favor giving illegal immigrants already in the U.S. an easier path by paying fines and back taxes and becoming guest workers without returning to their native countries. Firms that depend on immigrant labor say a get-tough program would stall commerce, hurt the economy and burden businesses and government agencies unfairly.

More to business' liking is Huckabee's support for a broad new tax credit for manufacturers that build products domestically, from automakers to appliance makers to software developers. He also backs an expansion of federal support for post-high school technical and trade training for students who do not go to college. He'd also support ambitious federal incentives to boost alternative fuel production with the aim of reaching independence from foreign oil in the next decade, but he does not explain how the government would offset what would be expensive new tax breaks.

Huckabee's strong language on trade could be controversial. Companies benefiting from the export boom may feel threatened by his opposition to some trade deals and his call to use tariffs and other trade weapons to force other nations to open markets.

And Huckabee's general tax policies are a huge question mark. Some managers might be wary of a Huckabee administration, given some of his decisions as governor. For example, as governor, he decided to hike sales and gas taxes instead of cut spending in the face of a big deficit. And his main tax plank, replacing federal income, corporate and payroll taxes with a 23% national sales tax, may be viewed as an unrealistic goal, although it has the support of several respected economists who say a consumption tax would spur business and economic expansion and increase personal savings rates. Business lobbies, in particular, would hesitate about backing a plan that would ultimately erase special tax provisions benefiting them that are dotted throughout the federal tax code.

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