The Big Story Blog

Perry opening the door to flat tax debate?

Posted at 3:13 PM on October 19, 2011 by Paul Tosto
Filed under: Economy, Politics, Taxes

flattaxform.jpg

Oh, it's a thing of beauty: The flat tax postcard. I recall the one above from the 1998 flat tax plan offered up by Republicans Rep. Dick Armey and Sen. Richard Shelby.

Now comes GOP presidential candidate Rick Perry.

The New York Times this afternoon reports that Perry next week will propose a flat tax "as part of a tax overhaul program, signaling a new effort to separate himself from Mitt Romney, the former governor of Massachusetts, and the rest of the Republican field."

The allure is obvious: Great rid of all the tricks and loopholes, make the tax code so simple that anyone can do their taxes in a few minutes, jot on a postcard and vanquish the legions of tax attorneys and lobbyists paid to bend the current giant code in their favor.

The basic problem is also clear. Some people will pay more and some people will pay less, and the people who expect to pay more are going to fight hard to stop it.

Here's some background on the flat tax:

The modern debate began almost exactly 30 years ago with a couple of economists writing an op-ed in the Wall Street Journal. The op-ed became a book that influenced a generation of mostly-Republican politicians. The 1990s were the Golden Age of flat tax plans.

Politically, though, it was an impossible climb, with claims of unfairness coming from the right and left. Publisher Steve Forbes, a longtime proponent of the flat tax, resuscitated the idea with a 2005 book -- which features a cover photo of Forbes holding the postcard. (The Times reports that Forbes is advising Perry.)

It hasn't come up for a ton of discussion since then. Despite being a perpetual non-starter, this might be the best time ever for the flat tax.

Why? Because it takes power away from Washington, its current supporters say. And we're in a climate where the public overwhelmingly blames Washington for the nation's economic woes.


About Paul Tosto

Paul Tosto

Paul Tosto writes the Big Story Blog for MPR News. He joined the newsroom in 2008 after more than 20 years reporting on education, politics and the economy for news wires and newspapers across the country.