Tuesday, October 25, 2011

Rick Perry, the flat tax, and the road to political recovery

I've been arguing for some time now that it's way too early to count Rick Perry out. He's still the most formidable conservative in the race, the overwhelming majority of Republicans are anti-Romney, or at least uncomfortable with Romney, and he can certainly rebound off his recent lows and remake himself as the voice, and choice, of the right (and hence of the GOP base).

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. The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents.

This simple 20% flat tax will allow Americans to file their taxes on a postcard, saving up to $483 billion in compliance costs.

It's a terrible idea*, one sensible Republicans (including, once upon a time, Mitt Romney) used to be against. Now? Now it's a way to appeal directly to the base, to score major points with those who will choose the Republican candidate for president in 2012.

Give Perry this, he knows what buttons to press, or at least his handlers/puppetmasters do, and this is part of a broader effort to repackage him following a miserable start to his campaign (that saw him peak way too early, expectations way too high), a failure to unite conservatives against Romney, and some horribly embarrassing debate performances, leading to the widespread narrative, true or not, that he's an idiot, and that there's no way he should ever be president.

Why else do you think he's playing up Birtherism? Conservatives are swooning again. Romney should be worried. Very, very worried.

*As for the flat tax, Perry's support for it, and Perry's strategy in general, here's Jon Chait:

Meanwhile, Perry is opening a new front with his forthcoming proposal for a flat tax. But this is also a position Romney would rather avoid having to match. The federal income tax charges high-income earners a higher rate than middle- or low-income earners. Replacing that with a tax that charges everybody the same rate would shift the tax burden from the rich to the non-rich. If you use a flat tax to raise the same amount of revenue, you give the rich a huge tax cut and give everybody else a tax hike.

Generally, Republicans proposing a flat tax have gotten around this problem by setting the rate at a point where the middle class would pay about the same amount, and the rich far less. That lessens the political vulnerability, but doesn't eliminate it — Democrats can point out that the reduced revenue will require deeper cuts in Social Security and Medicare.

The flat tax is another issue that drives a wedge between what's popular in a Republican primary and what's popular in a general election. Romney fiercely opposed it in 1996, even taking out a newspaper ad to attack the idea. It would be hard for him to match Perry on the issue. But Romney will have to try to mollify conservatives who love the concept. The result will be another issue where he adopts a complicated, yes-but stance.

And that plays right into Perry's hands. The Perry plan is also plain as day. He takes uncompromising positions to Romney's right, on health care and taxes, and forces Romney to adopt contorted positions in return. Then Perry uses Romney's contortions to craft an image of his opponent as slick and unprincipled.

A flat tax would be DOA on Capitol Hill. At a time when the majority of the American people want to see higher taxes for the wealthy, and when so many are struggling with a weak economy, a plan to redistribute the tax burden upwards isn't going to go far.

But that hardly matters to Perry, who is focusing not on what is workable in Washington (and around the country) but on what will attract Republican primary/caucus support. And that means, as Chait says, taking hard-line ideological positions well to the right of Romney and thereby forcing Romney on the defensive, where he doesn't do well.

Look for Perry's poll numbers to improve in the days and weeks ahead. He's back.


Labels: , , , , ,

Bookmark and Share


Post a Comment

<< Home