|Rick Perry's "postcard" tax return|
(Photo by Mary Ann Chastain/AP)
In the article which he authored, Perry offered his vision for simplifying the tax code and shrinking government toward the end goal of boosting the economy and balancing the budget.
Not to be out-marketed by rising Republican star Herman Cain and his 9-9-9 Tax Plan, Perry named his economic package the slightly less catchy Cut, Balance, and Grow Plan.
The three pillars of Perry's plan, cut taxes and spending, balance the budget, and grow the economy offer nothing new on the surface, but the devil is always in the details. Sadly, when you dig into the details of Perry's plan on his campaign website (which I already did to save you the suffering), what you don't find is anything new. What you find instead is an endless scroll of self-evident charts and graphs that are at best irrelevant (five different pie charts and a bar graphs to illustrate that the tax code is burdensome seems like overkill), and at worst misleading (a chart labeled "Swimming in Debt" shows we have the highest debt-to-GDP ratio since World War II, but fails to explain how this resulted largely from the Bush administration's refusal to raise taxes while waging two wars).
page-and-a-half summary of his plan in outline form which is much simpler to digest than the endless scrolling.
Ineffective as it may be, there is a lot packed into Perry's economic package.
Let's review the highlights of each "pillar."
To "Fix" Taxes
- Perry proposes we all pay a flat 20% income tax rate (plus existing payroll/FICA taxes). As with Cain's plan, Perry's flat tax would result in a reduced rate for the wealthiest Americans and an increased rate for lower and middle income Americans.
- Perry proposes an end to the Capital Gains and Death taxes, both of which are seldom incurred anyway by middle and lower class Americans. Again, this primarily benefits the already rich class.
- Perry would allow taxpayers to choose between the new 20% flat tax rate and the current system. This means Americans would have MORE HASSLE and not less in calculating their annual taxes, as we would all need to determine which system worked out best for us.
- Corporate tax rates are reduced to 20%as well. This is about an 8% reduction in the current average rate, and the implication is that businesses would hire more if they paid less taxes (although business leaders repeatedly state that increased demand and a bonafide need for more labor are ultimately what drives hiring).
To "Balance the Budget"
- Perry proposes we cap federal spending at 18% of our Gross Domestic Product. Since the average for the last 50 years is 18%, and most years since 2000 have been below that mark (according to Perry's graph), I'm unsure why we need to make this a policy.
- Perry's plan includes several budgetary and procedural rules that have been proposed before and that are highly unlikely to ever become law (elimination of earmarks, "pay-go requirements for new laws, etc). My personal favorite is the implementation of a government hiring and salary freeze until the budget is balanced, which he estimates would be 2020.
- Reform Social Security and Medicare - primarily through raising the eligibility ages for receiving benefits from these programs (though he is reluctant to say what the new eligibility age should be). Still, I have to say that in light of increased life expectations, this one makes good sense. It's also wildly unpopular and takes balls to propose. Props to Perry on this point.
To "Grow" the Economy
- Reduce "red tape" by freezing and reviewing all new business regulations passed since 2008. Whatever. Our economic woes began well before 2008. This is just an attempt to impose a political philosophy, but it won't solve anything.
- Repeal "job-killing" laws - like Obamacare and Dodd-Frank Wall Street Regulation (both laws passed in 2010). Again, do laws passed a year after the official end of the recession really constitute root causes of our economic woes? Pathetic. Dodd-Frank was passed to regulate the financial industry because of the economic clusterfuck left in the wake of an unchecked industry. These laws didn't cause our unemployment problems, and their repeal won't solve them.
In total, Rick Perry's Cut, Balance, and Grow is not as memorable a name as Herman Cain's 9-9-9 Plan, and sadly, it is also no more sound an economic approach. The flawed logic of fostering economic growth for our nation by simply making rich people richer has been tried and it has failed. That's why Barack Obama was elected in the first place, and in the absence of new ideas from the right wing of American politics, it's why he will be elected again in 2012.