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article imageIn answer to Cain's 9-9-9, Perry offers his own flat tax plan

By Michael Krebs     Oct 25, 2011 in Politics
After Republican presidential candidate Herman Cain set the bar with his 9-9-9 flat tax plan and his GOP competitors appeared to have nothing similar in response, Texas Governor Rick Perry introduced a hybrid 20 'flat' tax.
Can a flat tax plan be considered "flat" if it is opt-in only and if it has numerous deduction sweeteners across a select income class definition? This is one of the many questions likely to emerge from Republican presidential candidate and Texas Governor Rick Perry's 20 percent flat tax proposition laid out on Monday, as the National Journal reported.
Perry's plan calls for a voluntary 20 percent federal income tax, for those who wish to pay it, and retains key popular deductions for mortgage interest and charitable donations for households earning less than $500,000 per year. The "Cut, Balance and Grow" plan, as the Perry campaign has labeled it, would also allow taxpayers to file their 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," Perry wrote in a Wall Street Journal Op-Ed published Monday. "By eliminating the dozens of carve-outs that make the current code so incomprehensible, we will renew incentives for entrepreneurial risk-taking and investment that creates jobs, inspires Americans to work hard and forms the foundation of a strong economy. My plan also abolishes the death tax once and for all, providing needed certainty to American family farms and small businesses."
The Perry "Cut, Balance and Grow" plan presents a contrast to fellow Republican presidential contender Herman Cain's 9-9-9 plan that was criticized by Liberals as a burden on lower-income Americans that currently do not pay any income taxes and by Conservatives wary of a new 9 percent national sales tax.
Cain's plan, while dismissed outright by his Republican competitors, now appears to be gaining more support among Republican establishment circles, further complicating Governor Perry's chances of winning the GOP nomination.
"Start with the fact that Cain is not, well, one of us, 'us' being the Republican establishment," Irwin Stelzer wrote in The Weekly Standard. "His two millionaire opponents, both having reached that elevated station in whole or in part because they were born into it, make it clear that no man who has worked his way up, and made a bit of money in the pizza business, can be un homme sérieux. Developed the plan on the back of a pizza box, they chortle. Never mind that this might be as good a way as using the computer models that told President Obama’s team that his massive stimulus plan would lower the unemployment rate. Or that the criticism smacks of the aversion of the British hereditary classes to 'trade.' It is an unbecoming line of criticism for a party that is supposed to represent the upwardly mobile entrepreneurial class."
But even under the weight of criticism heaped onto the Herman Cain campaign, he still remains the GOP front-runner, with Perry trailing far behind, according to the latest CBS-New York Times poll covered by Politico. Perry hopes to climb out of his fifth place standing with his newly announced plan, but the simplicity of 9-9-9 may be a difficult blueprint to overcome.
More about Herman Cain, Rick perry, Taxes, Taxation, Economics
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