No detailed analysis of how much revenue the plan would raise has been done, but it seems highly likely that the number would be much lower than under the current system, and lower than Perry’s team is claiming. Governor Perry has already had to put an optimistic gloss on his proposed spending cuts to get his numbers to balance. If his revenue estimates are also too optimistic then the net effect of his proposals will be to make our already precarious budgetary position worse. The personal accounts Perry wants to introduce to Social Security will also make the budget deficit worse for many years, which is a bigger problem now than it would have been a decade ago…
Like Romney’s economic plan, Perry’s has nothing to say about housing or the financial industry, and not much to say about health care for young and middle-aged people. On the subjects he has chosen to tackle — taxes, spending, and regulation — Perry wants to go in the right direction: toward less of each.
But his plan reads like a second draft. He has chosen to avoid the political liabilities of a flat tax by forgoing its distinctive advantages of simplicity and low compliance costs. The hybrid tax system he would create would in no important sense be flat, and Perry seems unwilling to spell out the cuts necessary to get spending in rough balance with the amount of revenue it would collect. Republicans should try for something better.
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