Things didn’t turn out so well for Steve Forbes, the last Republican running for president on a flat-tax platform. Economists have panned Herman Cain’s version to the point of its becoming a national laughingstock. That hasn’t stopped Mr. Forbes’ choice for president, Texas Governor Rick Perry, from announcing that he’ll announce his very own flat-tax plan today in South Carolina:
On Tuesday I will announce my “Cut, Balance and Grow” plan to scrap the current tax code, lower and simplify tax rates, cut spending and balance the federal budget, reform entitlements, and grow jobs and economic opportunity.
The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate.
So when it comes Rick Perry’s regressive flat tax, America would get to pick. Still, the Texas governor would have us know that America needs to scrape scrap the current, very-very-very wordy tax code in favor of something simple, like his plan. And what could be simpler than filing your taxes on a postcard?
This simple 20% flat tax will allow Americans to file their taxes on a postcard, saving up to $483 billion in compliance costs…
For all the money he plans to save with that 20 percent flat tax – take that, 9-9-9! – it’s apparent that the “Cut, Balance and Grow” elements of his plan are listed in order of priority. Stripping regulations and cutting taxes (including corporations and capital gains) by the bushel, Governor Perry sticks to the talking point about a debt that will be as large as the American economy. That outcome is especially likely if you keep revenues down and don’t grow the economy. (Give him some credit: at least he resisted likening us to Greece.)
The flat-tax idea is not a practical one, New York Times columnist Paul Krugman argued on last Thursday’s TRMS. Neither, as Mr. Forbes proved in 1996, has it been a winner at the ballot box. Yet Governor Perry is releasing this economic proposal at a time when his campaign desperately needs a boost. And it’s catching. Mitt Romney, who once dissed the Forbes plan as “a tax cut for fat cats,” is now making noises about a flat-tax plan of his own.