Tuesday, October 25, 2011

Rick Perry Tells Us Why A Flat Tax Will End Recession

Rick Perry has bet that the GOP base will reward him for arguing against the progressive federal income tax. He claims that a system in which everyone pays the same tax rate is just what we need to fix the economy. This is a view that resonates well in the GOP base. George Bush was compelled to base his campaign on cutting the taxes for those with high incomes because one his opponents for the GOP nomination, (Steve Forbes) was gaining popular support by proposing a flat tax.

Rick Perry makes his case for the flat tax by arguing that those with low incomes will be better off if those with high incomes have their taxes lowered. The only problem with this claim is that it does not explain how the US economy prospered for the last 70 years with a progressive income tax in place. The tax system does not seem to have much bearing on economic growth, unless one wants to argue that our high growth rates after the war were due to the much higher tax rates in place prior to the Reagan era.
Its easy to explain why those with high incomes would ignore the evidence against Perry's argument. Its more difficult to provide a charitable explanation for why those in the GOP base with low incomes also support Perry's claims.

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