Perry Jumps On the Flat Tax Bandwagon

[CeeKay]

http://www.msnbc.msn.com/id/45000118/ns/politics-decision_2012/

The flat tax, an idea that seems to offer simplicity and efficiency in place of the complications of the current tax code, will enjoy a revival Tuesday when Texas Gov. Rick Perry unveils his single-rate tax proposal.

Perry has witnessed the success, at least in terms of publicity and in some polls, that businessman Herman Cain has had with his "9-9-9" plan—which calls for a 9 percent tax on personal income, combined with a 9 percent sales tax and a 9 percent corporate income tax.

His speech tomorrow in South Carolina is an attempt to give his campaign a vivid and defining idea. It is in particular an effort by Perry to draw contrasts between himself and Mitt Romney, the former Massachusetts governor with whom Perry has sparred on the campaign trail.

a last desperate gasp?

[CeeKay]

looks like his plan is 20/20:

The code that Perry is proposing would feature a 20% personal income and corporate tax, the elimination of Social Security and capital gains taxes, and the preservation of popular deductions for mortgage interest and charitable giving. Under the "cut, balance, and grow" plan, tax loopholes for corporations would be phased out while the standard exemption for those earning $500,000 or less would be increased to $12,500.

His economic team believes that those changes, combined with deep spending cuts and entitlement reforms including a gradual increase in the retirement age, will encourage so much growth and save families and corporations so much in compliance costs that the budget could be balanced by 2020.

Perry contrasted the single postcard with a dishwasher-sized stack of paper boxes that he said represents the current maze of regulations. (Under Perry's plan, Americans would still have the option to use the existing tax code over the flat tax.)

didn't one of Tom Clancy's books have some guy introduce a tax form the size of a post card?

[Fireball1244]

I find it interesting that he'd allow the current tax code to continue. While most flat-tax proposals are both disastrous in terms of revenue generated *and* crippling to middle and lower income folks, this would allow smart middle and lower income folks to skip the flat tax and pay using the current rates, while allowing the wealthy to dramatically lower their rate by paying the flat tax. So this proposal is more disastrous in terms of revenue than the regular flat tax proposals, but not necessarily economically crippling to middle and lower income folks, just more inconvenient for them than for the rich.

[Ironrod]

While all Republican tax reforms are designed (openly or not) to enrich the rich, this one at least doesn't do it by gouging everybody else. Instead it just guts the government by dramatically increasing the structural deficit.

These flat-tax proposals never make it out of the primaries, though, so it's not too worrisome.