Perry's Flat Tax

[Embar Angylwrath]

Perry announced his version of tax code reform, an optional "flat tax" that allows for deductions for charitable giving, state/local taxes, and home mortage deductions, and caps the rate at 20% for individuals and corporations. Although I can't verify this yet, there are some reports that for a family of four, the first $50K of income is exempt from taxation.

Although the idea of an optional tax system removes the fear factor (but increases the complexity, since there are really two tax systems), I really can't see how this will do anything but decrease revenues to the US (whcih in itself may not be a bad thing, we have a spending problem). Most everyone is going to choose the least expensive tax option, although maybe Buffet can put his considerable money where his mouth has been and pony up more. I don't really see how anyone under this system will pay MORE in taxes, so its not really regressive if everyone has a choice to participate under the current system or the new system.

[Lurker]

Just curious, are you really taking this moronic plan seriously?

[Kulaf]

I don't honestly see this plan working as it seems to narrow the tax base, and keeping those exemptions is just pandering to special interests.

[Ddrak]

All I can think is Perry's smoking some good crack over there at his campaign HQ.

It's not regressive, until the flat tax kicks in, which means it's biased towards both ends of the income spectrum and hammering the middle class (relatively speaking), though no one would be "worse off" on the raw amount of tax paid.
It's going to murder government revenue, which means everyone would be worse off from the considerable drawbacks required in government assistance, or the massive borrowing it would have to incur. A CBO analysis would be... interesting.

I just don't think it's workable at all. The whole thing just reads like a campaign manager dreamed it up without bothering to think through that it would actually impact anything.

Dd

[Embar Angylwrath]

All I can think is Perry's smoking some good crack over there at his campaign HQ.

It's not regressive, until the flat tax kicks in, which means it's biased towards both ends of the income spectrum and hammering the middle class (relatively speaking), though no one would be "worse off" on the raw amount of tax paid.
It's going to murder government revenue, which means everyone would be worse off from the considerable drawbacks required in government assistance, or the massive borrowing it would have to incur. A CBO analysis would be... interesting.

I just don't think it's workable at all. The whole thing just reads like a campaign manager dreamed it up without bothering to think through that it would actually impact anything.

Dd

That's kind of where Im at. This looks more to me like a campaign tool (reaction to Cain's 9-9-9 plan) than a legit tax reform plan. With the ability to choose the least expensive tax option, revenue to the government would be curtailed. Not a bad thing on its face.

Personally, I don't see this as "regressive" at all to any segment of the populaiton if they get to choose what they have now or go with the flat tax. Trying to make the argument that the regressiveness would come in reduction of government services is sort of boogeyman-ish, since those are choices of where to spend the government revenue, and allocation of revenue is a choice made by Congress, and not a part of the tax plan itself. I think it's a more intellectually honest position to say it would put Congress in a very difficult position on how to carve up a smaller cow.