Skip to comments.PERRY’S FLAT TAX IS SIMPLIFICATION BUT NOT REFORM
Posted on 10/29/2011 6:46:57 AM PDT by Hojczyk
But Cains proposal is so very much more important. Perry will nibble around the edges, freeing valuable hours from tax preparation to be available for wealth creation. But Herman Cain would establish America as a beacon for investors, entrepreneurs, inventors, creative business people, and all manner of upwardly mobile, ambitious men and women. He would give the U.S. the lowest personal and corporate tax rates in the world, and the only place where investment earnings are tax free. To trivialize Cains big idea by comparing to to Perrys small one is a vast disservice. Perry would not reduce the amount of money taken in by income and corporate profit taxation. He would just shift it to shorter forms and a nominally lower rate (but not really lower). Taxes would appear to be cut, but the amount we would have to pay would be more or less the same. He even strives to have his program seen as revenue neutral.
Cain would shift about half of our nations tax revenues to consumption taxes and away from income taxes. He would vastly reduce the disincentive to earn and encourage savings and investment by taxing spending.
It is not enough to undo the damage Obama has done to the economy by repealing his spending, taxing, health care, and regulatory actions. All that will do is dial us back to the sick economy Bush bequeathed to America. The diseases of the first decade of the 21st Century will still be with us. But Cains ideas really get at the heart of the problem in much the same way that Reagans reducing of the top personal tax rate from 70% to 28% solved the stagflation of the 70s.
Cains reforms are the real deal. Perrys are a pale imitation.
(Excerpt) Read more at dickmorris.com ...
Perry’s plan caps spending.
The toe-sucker is now a tax specialist?
In any case, Cain or Perry, any reform or simplification moving towards relief for the tax payer is a step forward.
Sounds like Dick is on the Cain train. Guess he wants to win that bet with BOR.
I’m really surprised at Dickie! I suppose the establishment Romney bunch did not want him around because he was certainly peddling their droppings for the longest time.
Problem with Perrys tax plan are numerous.
Perrys plan is a what do I need to say to get votes plan rather then what do we need to do to fix the tax code plan.
It does not broaden the tax base thus leaving the current system of payers and payees in play for future political exploitation.
It keeps in place the corrupt practice of playing favorites in the tax code by still granting special exemptions. This is the greatest flaw in Perrys plan. He leaves in the politically popular exemptions to pander to certain voter blocks. It the best example of where his plan is not a serious attempt to address the fundamental problems in the tax code but a political gimmick designed to rejuvenate his flagging campaign.
It maintains the current focus on taxing income instead of consumption thus punishing the producers at the expense of the users.
It leaves in place the current ability for trust funds and the massively wealthy to avoid paying any tax by structuring their payouts in forms other then income.
It does nothing to tap the underground off the books economy.
So while Perrys sort of flat tax is an improvement over the current system, it is merely tinkering with the existing tax code while leaving in place the same corrupt, flawed foundation.
Of the two, Cains 9-9-9 is the much better plan
It adds a new layer to the existing tax code. That is not simplification.
It's the spending that is crippling us not the taxes.
Without the spending we don't need the taxes.
Neither plan stands a snowballs chance in hell of becoming law.
If Dicky the toe sucker is for something I tend to shy away from it.
The CATO institute has all but endorsed Perry’s plan.
Rick’s plan sucks dick Morris says.
(Moderators have mercy: my keyboard is 999% to blame. It lacks capital. And comma sense.)
My accounts have worked the Perry numbers on my return, and on every employee's, and guess what, to the person we save money.
Just the opposite with Cain's 999.
It gives us a choice - and that’s a start.
Perry’s plan is a “what do I need to say to get votes” plan, it is not a serious attempt to address our fiscal crisis.
Funny how none of the other candidates brought up this issue until Herman Cain propsed his 999 plan. At least Cain had the balls to toss the idea out there, and see what the people made of it. Sure it can use some tweaking and refinement, but it shows that Cain isn’t afraid to push forward with new ideas that may make things better for everybody.
Perry was for the flat tax before any of us heard of Herman Cain.
He touted it in his book “Fed up”
Interesting to hear.
I’m still on the fence, I confess. However, if your accounts showed that you (and your employees) all saved money with Gov. Perry’s plan, as opposed the 9-9-9, I find that enlightening.
Without disclosing any personal info on your part, what would say the average saving was, in ballpark numbers?
people should research the only tax policy Perry pursued and enacted as governor, not the plan that magically appealed to him when Cain and his 9-9-9 mantra eclipsed him in the polls:
“Rick Perry and the Largest Tax Hike In Texas”
Yeah, I pay that tax, and it was nothing compared to obama’s 2500% increase on tobacco tax.
I prefer the 999. Not only would we save about $1200, but it makes the mooches contribute.
but the new business tax coupled with one added to tobacco still counts as the largest tax increase in Texas.
Morris is merely giving his audience what it wants.
Was Karl Rove,Dick Morris Or Frank Luntz Involved In Fox News Poll About Sarah Palin
According to this guy , well listen to it. Then consider the source.
I agree with him that Rove,Morris, and Luntz have a pony in this show and we know it’s not Perry,Cain,Palin Newt. And that Fox by going along with the poll fixing should not have any of them as commentators.
a few days ago Morris was saying Perry’s plan was great. Guess he got his marching orders from Rove.
I like Cain’s plan. He’s proposing that the millions of illegal immigrants pay taxes just like the rest of us.
Perry and Newt let the illegals slide by without paying anything.
How does Perry’s plan let the illegals slide?
For the first time ever I completely agree with what Dick Morris says here.
Tinkering around the edges WILL NOT fix anything! Never has and never will!
Whenever the issue of raising taxes on the “rich” has arisen, I have attempted to bring the forgotten stakeholder in all such arguments into the discussion-the consumer.
I’m pretty sure most on this forum are aware that the “rich” happen to be our employers, entrepreneurs, and investors, and my contention has been that taxes are an expense to them, such that every good and service produced will have included in its end price the taxes charged. The consumer, in the end, pays for all tax increases, especially those levied on the aforementioned producers. This is a very good argument to use with liberals who advocate increasing taxes on the “rich”.
When looking at the Cain and Perry plans, I can’t help but feel the consumer is being ignored once again.
Perhaps the most important benefit of the Cain plan is that there will definitely be some unknown and in my view unquantifiable reduction in the cost of goods produced and services rendered. This will happen by virtue of the fact that taxes are a cost of producing these goods and services, and these taxes will go down during each step of the production process, on up until the purchase at retail by the consumer.
It’s my bet that this reduction in prices to consumers would be significant. It only takes one player in any given market to decide it will use the new cost structure to increase market share, then all other players will have to follow or perish.
I say the effect is unquantifiable because it will depend on the relative competiveness of any given market. I own a small company and I can assure you my competitors will lower their prices by virtue of any reduction in cost, and I will have to react to remain competitive, as all players in my industry are vying for market share in addition to profit.
Just my two cents.
Indeed ... You’re absolutely right ... Perry’s campaign is just a professional Karl Rove boondogle “smoke and mirrors” circus ...
“Perry and Newt let the illegals slide by without paying anything.”
That is not an intended feature of either man’s plan. It is merely an indication that those plans are adjustments to the old as opposed to Cain’s which is new and decidedly bold.
Which is Dick’s point.
And... regardless how many feet (or at least toes) have trodden his tongue in times past... he is quite correct on his Perry=simplification versus Cain=reform assessment.
No question, flatter is gooder.
But Cain’s shift of emphasis away from income taxes toward consumption taxes is the true freedom-lover’s fancy.
While I understand some conservatives’ groanings about adding another form of taxation, I fail to comprehend why they don’t recognize such natural and common revulsion as the consumption tax’s number one advantage.
All spending should hurt. Everybody.
There is no tax reform without the abolishment of the anti-American IRS.
Perry and even Cain are trepid about true "Reform."
It's like they are looking for less objectionable ways to confiscate wealth, and hiding the pea under a different nut. Any social engineering, picking winners or losers in a tax plan, dooms it to ultimately fail, i.e. Cain's "Empowerment Zones" is nothing but meddling in the market. It is hard for any politician to not put his hands on the market.
I say pick ONE, Make it simple, make it fixed and tied to the GDP, so the politicals can't tamper with it; put the spenders on a diet (balanced budget amendment); and get out of the way.
As Murray Rothbard put it "J.B. Say's policy recommendation was crystal clear and consistent with his analysis and that of the present paper. "The best scheme of [public] finance is, to spend as little as possible; and the best tax is always the lightest."
No matter the form of taxation, it is the spending that is the problem. "Revenue nuetral" It's kinda like rearranging the chairs on the Titanic
Perry’s plan leaves the Fedzilla tax code in place indefinitely. (Although any major reform will have a transition period where the old tax code is being phased out, Perry’s plan doesn’t do that. The old tax remains.)
Thus, crony capitalism and corrupt funneling of favors will continue. And may even increase, since the number of tax payers paying under the code will decrease, thus there will be fewer people paying attention than even are now.
Some argue the flat tax will be so great that the old Fedzilla code will die on the vine, a natural death, the result of “choice.”
DON’T BET ON IT.
If history teaches us anything, it is that the Fedzilla code will never die unless it is killed. 999 sticks a knife in it. That is necessary.
The congresscritters and special interests will get even busier entrenching their schemes, payoffs and rip-offs into the code, all the while arguing that it’s continued existence is necessary for “choice” and that “it’s not fair” because they might lose ten cents under the flat tax.
Perry’s flat tax provisions are very generous and provide many jellybeans to present taxpayers.
But overall the plan is a disaster without a clear way to kill the Fedzilla code and a clear way to broaden the tax base, and thus make most Americans have a stake in the system and ALL congresscritters accountable to ALL their constituents if they raise tax rates.
In the end, I don’t think it’s even accurate to say Perry’s plan “simplifies” anything.
It creates a two-tiered system, a hybrid flat tax and Fedzilla code tax system. Thus, it builds in even more bureaucracy and, importantly, stands to greatly increase rather than eliminate compliance costs. Many taxpayers will need to figure their taxes twice to determine which of Perry’s two systems is most advantageous. And what happens if a taxpayer needs to amend a prior tax return? Is there again the choice of using either system?
At the same time, the Perry plan does nothing to broaden the tax base by making more nontaxpayers into taxpayers.
That is the ultimate failure to “simplify.”
If we don’t implement the simple principle that everyone needs to have a stake in the system, the takers will soon outnumber the producers and it won’t matter one whit what the tax rate is at that time.
Once they’re in the majority, the tax rate will quickly be raised — look, Obama would have already raised rates sky-high if he could have gotten away with it. Watch for them to go up to 90% once the gimme train gets rolling. Remember: FDR raised rates to 90%, and for the same reason: to pay for all the free stuff demanded by those not paying taxes.
The tax system and spending are inextricably intertwined.
Reforming the tax system in a way that gives Fedzilla less power and more accountablility, as Cain’s 999 plan does, is an important step in reducing spending.
Bottom line: tax reform and spending cuts work together, they are not mutually exclusive projects.
That’s not good.
With Rick Perrys call for a 20% Flat Tax, the movement for fundamental, pro-growth tax reform became unstoppable. Perry, Herman Cain, and Mitt Romney are now the only viable candidates for the Republican presidential nomination remaining. With both Cain and Perry now offering dramatic pro-growth tax reform proposals, Romney will either jump on the tax reform bandwagon or be left in the dust (or possibly both).
With 75% of Americans saying that the country is on the wrong track, Progressives have started to pin their hopes for the 2012 elections on the notion that the American people dont want pro-growth tax cuts, and would instead prefer to punish the rich via tax increases.
Once the electorate concludes that drastic change is needed, they will elect someone promising drastic change. In terms of tax policy, right now, only Perry and Cain are advocating drastic change. Romney is currently offering an economic program that involves minor tinkering at the margins of the tax code. Meanwhile, Obama is promising to fight for tax increases that would make the economy worse.
Under current circumstances, it will do Progressives no good to point out flaws in Cains 9-9-9 program, or in Perrys Flat Tax plan. The voters know that major tax reform would have to be enacted by Congress, and that the problems and inequities of any outline would be ironed out during the legislative process. They also realize that by the time that the crucial details of fundamental tax reform would be decided, a new president would have had another 15 months to refine his proposal.
Accordingly, what the electorate is listening for right now is the candidates level of commitment to major pro-growth economic policy reforms, and a sense of how they view the world and make decisions. The voters are not particularly concerned about the details of any particular plan, because they know that the plans being offered on the campaign trail are not what will emerge from Congress.
The electorate knows that America needs a sustained period of very fast economic growth. Only prolonged, rapid GDP growth can create the 15 million good, high paying, permanent jobs that we need to get back to full employment. And only fast economic expansion will make it possible for the nation to afford Social Security and Medicare without painful cuts in benefits. The voters also know that raising marginal tax rates would just make all of our problems worse.
Continued at the link, above. Thread HERE.
Well, by all means, let’s make it “all about me.”
BTW, did your accountants account for the fact of how pricing and other tax-sensitive behaviors will change?
Look. I’m not saying the impact on any given individual is not important. Of course it is. But it’s also important, maybe more so, to think about the impact on the nation.
Also please consider that what you are comparing to reach the conclusion that you’re better off under this plan or that is your tax status TODAY. But your tax status TODAY is not set in stone. In fact, Obama would change it tomorrow if he could: he would immediately raise taxes on producers sky-high if he could get away with it.
If you’re talking about the Perry plan and the fact that the flat tax is optional, in my view, that the major flaw, not a selling point.
Do you really want to see the present tax code debacle extend and entrench out into the future?
And that’s just for starters.
What we need is “bold,” and what “optional” is is weaselly.
Herman Cain was on Steve Forbes’ campaign staff when he was running for President on a flat tax program.
ALL conservatives who have been paying attention have been interested in various iterations of flat and fair tax systems for DECADES.
The point here, though, is that Cain indeed revved up the national discussion and passion for tax reform. It took a while for Perry to get anything out there — even though, as you point out, he was supposedly well-versed in the issue since it was part of his book. But he still didn’t have a plan ready when he started his run for President.
Such a very good catch! Good one!
There is no abolishment of the IRS without abolishment of the present tax code.
Cain’s plan does that (probably after the usual transition period).
Perry’s plan does not.
Not very logical.
Of course, in the real world major reform legislation is never imposed without a transition period and some grandfathering in of certain provisions.
Even Reagan’s tax cuts did not take effect for TWO YEARS. This was to allow business and individuals to transition.
And oh btw, the present Fedzilla code scraps provisions right and left whenever some congresscritter wants to or finds it politically advantageous. Ask an accountant how many times the depreciation schedules have been changed on a dime.
So people need not act as though they have blessed security and stability under the present code.
And this would only get worse under Perry’s plan because it balkanized taxpayers into two groups (flat tax payers and Fedzilla taxpayers), with each group having even less political clout than today to fend off tax hikes, crony capitlism and so on. There will be more shenanigans and sudden changes than ever.