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Oct 27 2011

Perry’s Tax Plan — Worse Than Cain’s

Rick Perry released his terribly amusing tax plan in the Wall Street Journal on Tuesday and it was greeted even by conservatives with hoot of derision. He’s actually proposing an optional flat tax — people can choose whether to pay a 20% flat tax or work under the current tax structure.

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.

Um. Rick. If you’re going to let people stay under the current tax code instead of the flat tax, you’re not going to “scrap the current tax code.” You’re just going to augment it with a whole new section. Even the National Review bluntly calls it “an embarrassment” and says that the plan “defies credulity.” You’re not off to a good start, Rick.

18 comments

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  1. 1
    Reginald Selkirk

    What a great idea. Let’s make all taxes optional. That should clear up the budget deficit in no time.

  2. 2
    fifthdentist

    Scoff all you want. Perry’s perceptive prescription will make the Baby Jesus so happy that he will cause a mighty blessing to trickle down on all of our unworthy heads and naughty bits. We will be drenched with a mighty stream of Jesus’ juice ‘o plenty and prosperity.

  3. 3
    davidct

    I notice that there is no mention of moving up to 20% for capital gains or overhauling the AMT. The only reason this proposal sounds reasonable is that the majority of taxpayers have a paycheck and have no idea what is involved in our tax code beyond what comes out of their paycheck.

  4. 4
    noastronomer

    You know those facepalm pictures? With people like Picard from Star Trek…

    Even if Ed added every last one he could find to this post it still wouldn’t come close to expressing how completely idiotic this idea is.

  5. 5
    matty1

    I read this as.

    1. A progressive tax with a top rate of 20%
    2. A right to make voluntary donations to the government on top of tax

    Why not just say that?

  6. 6
    eric

    Conservatives would not implement a flat tax if it was offered to them on a silver platter. Its a fairy tale they use to get their kiddies to go to sleep, but none of them seriously want it.

    We know this because a flat tax is offered to them every year, in the form of the AMT. All they have to do is…well, nothing. Make no adjustment to current law, and over time inflation will ensure that the AMT will replace the more complex progressive code for most taxpayers.

    Conservatives must actively pass legislation in order to prevent a flat tax. And guess what? That’s exactly what they do. (So do Dems, but since they aren’t crowing about the joys and beauty of a flat tax, its not hypocritical for them.)

  7. 7
    Raging Bee

    Is Perry even serious? This tax plan is right out of the ’80s comic strip “Washingtoon.” Bob Forehead (an obvious takeoff on Jack Kemp) needs a tax plan with a catchy name to pretend he’s an ideas man…”flat tax” and “fair tax” are already taken…so he invents the “fun tax,” where you just write the amount of tax that would be most fun to pay; and when everyone writes “zero,” we will achieve maximum economic growth.

    Seriously, if Rick Perry has to plagirize comic strips, can’t he at least find better comic strips to crib from?

  8. 8
    Tualha

    But this makes perfect sense. He’s from Texas. And everything’s bigger in Texas. So, he wants a bigger tax code.

    Also “Texas” is “taxes” scrambled up, so it’s not surprising that his tax ideas are scrambled too.

  9. 9
    ewanmacdonald

    *inhales through teeth* Oh, Ricky…

  10. 10
    Brain Hertz

    I notice that there is no mention of moving up to 20% for capital gains…

    That’s because the plan eliminates capital gains tax, and dividend income tax. In other words, it has provisions that not only reduces marginal tax rates for the moderately wealthy down to 20%, it reduces the rate for the top 1% down to zero.

    I’m kind of surprised that so little attention is being paid to this part. How can anybody take this guy seriously when his stated plan is to eliminate such a gigantic slice of Federal revenue?

  11. 11
    dcsohl

    So let’s get this straight… if you’re poor and your overall tax burden works out to 5%, you choose the existing tax structure and nothing changes.

    If you’re rich and your overall tax burden is 30%, you choose the 20% flat tax and get a significant tax cut.

    Rick, if you want to play with the big boys you’re going to have hide your massive giveaways to the rich better than that.

  12. 12
    ogremk5

    What I find even funnier is EVERY candidate saying “I will do this”. “This is my plan.”

    What can the president do?
    Begin the first 90 days of a war.
    sign legislation into law
    issue executive orders binding on federal agencies
    He can determine his own staff
    clemency
    withhold information related to national security
    some emergency powers

    Everything else (including the budget) must be reviewed and approved by at least the senate.

    In other words, regardless of what any of them say, they can’t just DO anything.

  13. 13
    Area Man

    That’s because the plan eliminates capital gains tax, and dividend income tax. In other words, it has provisions that not only reduces marginal tax rates for the moderately wealthy down to 20%, it reduces the rate for the top 1% down to zero.

    I’m kind of surprised that so little attention is being paid to this part. How can anybody take this guy seriously when his stated plan is to eliminate such a gigantic slice of Federal revenue?

    But this is yet another case of a crackpot Republican tax reform plan being essentially the same as all other Republican tax reform plans. As best as I can tell, all Republican tax reforms include doing away with (or heavily slashing) taxes on capital gains and dividends, in addition to the estate tax. It’s not just that they want to cut taxes on the rich, they want to tilt those cuts in favor of the unproductive rich, the people who simply live off the rents of the capital they inherited from grandpa moneybags.

    Why they haven’t all been chased out of Washington by angry mobs wielding pitchforks is a good question. It’s this sort of thing that makes me think that the OWS movement, with its pretense of being apolitical, doesn’t understand where the problem is coming from.

  14. 14
    Modusoperandi

    Now look, everybody knows that a nation is judged by how well it coddles the rich.

  15. 15
    jakc

    So it doesn’t simplify anything – I’ll have to do my taxes both ways to see which method is best. It won’t end people lobbying for changes to the tax code. You can’t freeze the tax code in place and at the very least you’ll have to index for inflation. The current tax code will be subject to rule changes, court rulings and of course, changes in the actual code. The Perry tax will bring in less money; the poorest taxpayers will be able to stay with 1040 EZ and the wealthiest will still have their accountants, but some small number of middle class taxpayers will pay more because it’s easier to do the flat tax.

    In short, a huge tax break on wealth (by eliminating capital gains & inheritance and estate taxes) with no real elimination of the complexity of the current income tax.

  16. 16
    dochopper

    http://blogs.dallasobserver.com/unfairpark/2011/10/ranchers_petition_perry_for_ha.php

    They had Days of prayer for rain in Texas instead
    WE GOT FIRE
    And they also found out Perry had CUT/Gutted the states Volunteer Fire fighting budget.
    It was done in a way that made it look like we still had protection but nope no money to operate it the process.
    The tag line of the uninformed CONSERVATIVE in this mess was and SMUGLY Stated as only a Wing nut can say it .

    “So you want to throw money at the Fire how will that help ?”

    Now we have the RED State farmers and Ranchers in need of help they to prayed for rain and have nothing but boney cows to show for it.
    They want the same state of NO TAXES to kick loose with some FUNDS to get hay from other areas down here to help them. I think they need help but Thanks to Grover Norquist and his pledge there is no wiggle room to help.

    Besides I am sure there are folks in the Private sector Churches and charities ready and willing to step in ……
    At least they see them out there to help the less fortunate .
    I wonder how that idea is going to work out for them ?

    Perry has Tax Plan a NO Tax Plan….. you don’t don’t want to be around when it works!

  17. 17
    Raging Bee

    I’m kind of surprised that so little attention is being paid to this part…

    What’s even more disgraceful is that even less attention is paid to the other side of that coin: the capital loss tax credit. If you realize capital gains — i.e., if you sell stock when its price is high — you pay a tax. But if you realize a capital loss — i.e., if you’re suddenly on hard times and you’re forced to sell stock at a bad time, like when the economy is tanking and lots of other people are forced to do the same thing, thus driving your stock price way down — then you get a tax credit to compensate for your loss. And if you realize a really big loss, you can extend the credit to cushion your tax hit for more than one year.

    So if you get rid of the capital gains tax, doesn’t that also mean you get rid of the capital loss credit? That policy helps those who need te least help, while shafting those who need the most help through no fault of their own.

  18. 18
    inquisitiveraven

    @Raging Bee: You have a point there, speaking as someone who’s taken advantage of that credit.

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