"The Economist": "Rick Perry's new tax plan is needlessly complicated and fiscally irresponsible"

[Nye Bevan]

RICK PERRY has unveiled a new tax plan no doubt with hopes of putting some pep in the step of his limping campaign. Mr Perry's proposal offers Americans a choice between the income-tax rates they face under the current dispensation or a 20% rate he calls "flat" but isn't, because the plan "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."

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Some wonkish conservatives are beside themselves with bemusement over Mr Perry's plan. "It is an embarrassment" which "defies credulity", says Reihan Salam at National Review. He goes on to observe that "Rick Perry’s proposal is not a flat tax. Rather, it is an alternative maximum tax or MAXTAX". Mr Salam contends that "what Perry has done is reverse the Buffett Rule. He has guaranteed that no American will ever pay more than 20 percent of her income in federal taxes". Mr Perry's plan would also abolish the estate tax and the tax on long-term capital gains, further comforting the comfortable in order to "spur growth".

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Michael Brendan Dougherty, a conservative commentator at the Business Insider, is also incredulous: "Perry's tax plan would preserve all the confusion, waste, and market distortions in the current code, and add another layer. The politicians who manage that would get a new tax code to fiddle with as a bonus — one that has little substance beyond massively cutting taxes for the wealthy. Perry is selling simplicity to the GOP's base voters — that's the most appealing thing about a flat-tax — but most of these voters would actually pay less under the current more confusing code."

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The early bipartisan wonk consensus seems to be that Mr Perry's plan is as incoherent as his typical debate monologue. Of course, bad policy can be good politics. Will run-of-the-mill conservative like the plan? My guess is they won't as soon Mr Perry's opponents make it clear that the proposal actually promises a confusing complexification of the tax system, offers huge tax cuts to the rich, all while threatening to deepen America's already perilous level of indebtedness.

http://www.economist.com/blogs/democracyinamerica/2011/10/rick-perrys-tax-plan