Forecasting Rick Perry Flat Tax - The Numbers Will Not Add Up

But That’s Ok – That is Only Required of Serious Plans

Every now and then an announcement takes place in the political and economic arena that just brings the thrill of anticipation to everyone who comments on such things. Such is the case when Texas Gov. Rick Perry, campaigning hard for the Republican Presidential nomination stated that he would be unveiling a Flat Tax Plan.

Gov. Rick Perry of Texas said Wednesday that he would propose a flat tax next week as part of a tax overhaul program, signaling a new effort to separate himself from Mitt Romney and the rest of the Republican field.

Now Mr. Perry seems to know a lot about some things.  He is especially knowledgeable about things in Texas, but that doesn’t mean you can just change the location of the “a” and the “e” in Texas and make Mr. Perry knowledgeable about Taxes.  So for Mr. Perry to come out with a tax plan, and have to defend it, well, it just makes all of us want to get up that much earlier that morning and enjoy the fun.

Mr. Perry is keeping mum about the details.

Mr. Perry did not offer details of how his plan would work. He said he wanted to scrap “the three million words of the current tax code and start with something simple: a flat tax.”

“I want to make the tax code so simple that even Timothy Geithner can file his taxes on time,” the governor said.

but he does get off a good line about the current Secretary of the Treasury who was unable to do his own taxes correctly.  However, after examining Republican tax proposal over the years, it is fairly easy to predict a number of things about Mr. Perry’s plan without actually seeing it.

1. The Plan will mean the same or more revenue for the government while lowering taxes for everyone.  (No that’s not a typo, that’s the way these people think).

2. The Heritage Foundation will do an analysis of the Plan and pronounce it impact to be correct.  In fact, they will have drawn that conclusion even before they see the Plan.

3. The Plan will shift the tax burden from the wealthy to the poor and middle class, but that’s ok because part of the Republican mantra will be that people who pay little or not income taxes should pay more.

4. At some point Mr. Perry will call his plan a “Fair Tax”.  He will have to call it that since no one else other than Conservatives will call it that.

5. Groups like the Tax Policy Center and other reputable think tanks will analyze the Plan and explain its many flaws.  The mainstream media will ignore those reports for fear of being called biased by reporting facts.

6. Steve Forbes will endorse the Plan, but not the candidate.

7. Mr. Perry will claim that the Plan will produce one, one, one and a half, two million new jobs.  This is because marginal tax rates on the wealthy will be reduced.  With no analysis and no evidence to back up the claim that lowering marginal tax rates stimulate the economy, supporters will have to take this on faith.

8. The Wall Street Journal editorial page will endorse the Plan, and instruct their opinion writers to praise the Plan and compare proposals by Mitt Romney unfavorably.

9. If the Plan receives approval in Republican circles Mitt Romney will propose a variation of it.  Otherwise he will attack it. In fact, he may do both.

10. The Plan will receive the stamp of approval from Rep. Paul Ryan (R, Wi). Once this is done Republicans and Conservatives and George Will will accept it as valid and intellectually sound, without any additional assurances or analysis.

11. Gov. Perry will avoid any questioning of his Plan, as he will not understand enough about economics and taxes to defend it.  He will, however, be seen regularly on Fox News answering questions about the Plan.  The questions will have been provided in advance.  This will enable him to get some, but not all of them correct.

Well, there it is.  From The Dismal Political Economist, news before it is news.