Presidential candidate Perry proposes a flat tax

Texas Gov. Rick Perry is making a bold grab for the conservative heart of the GOP with his decision to propose a flat tax as a core component of his economic recovery plan.

A flat tax has been an elusive dream of conservative Republicans for decades, occasionally springing up on the fringes of presidential campaigns, most recently in Steve Forbes’s White House runs in 1996 and 2000.

Perry may be the most viable presidential candidate to advocate the idea. His proposal comes on the heels of a warm early reception for Herman Cain’s “9-9-9” plan, a flat-tax proposal that has made Cain a favorite among some conservative voters.

In a speech to the Western Republican Leadership Conference in Las Vegas on Wednesday, Perry previewed the broad outlines of a tax plan that he said he will present in six days. Among its features, he promised, will be spending cuts, entitlement reform and a flat tax.

“I want to make the tax code so simple that even Timothy Geithner can file his taxes on time,” Perry said, a reference to the embarrassment that complicated the Treasury secretary’s confirmation in 2009.

A flat tax is just what it sounds like: one tax rate for all Americans. Right now, income taxes are progressive — the rate increases with each income bracket. Flat-tax advocates tout its simplicity — no complicated forms, few itemized deductions, credits or other loopholes. There would be no estate tax, no capital gains tax, no dividends tax.

Most flat tax plans still have some deductions. For instance, individuals may get a deduction for dependents, and businesses for wages and other costs. After those exceptions, however, everyone would pay the same rate.

Critics attack the flat tax for being regressive, to the benefit of the wealthy. Low flat rates, they add, would not raise sufficient revenue.

Rachel Weiner covers local politics for The Washington Post.


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