GOP Candidates Compete for Worst Tax Proposal

     Herman Cain has been in the lead, but now Rick Perry is trying to get some street cred with the Republican base by coming up with his own terrible tax plan. He has an uphill climb as it is clear that Cain's 9-9-9 plan is about the worst plan we've seen in modern history. It would cut social spending while radically raising taxes on most Americans to levels higher than they've ever been while sharply cutting the top .01 percent. With all the talk about those 50 percent of Americans who allegedly don't pay any taxes-which isn't true, they don't pay any income taxes, but more than make up for it between payroll taxes, and state sales, property, income and other assorted taxes-it's easy to forget that historically speaking the income tax was only intended for the highest tax brackets, it wasn't until the start of WWII and the need to raise record revenue for the war that most Americans become subject to the federal income tax. Prior to that the income tax was effectively a wealth tax.

    Rick Perry has been fading after the initial excitement about his "Texas Miracle" so he is now offering his own tax plan monstrosity. Of his "Cut, Balance, and Grow" plan he was asked if it favors the rich, to which he answered: I don't care. Obviously he doesn't though one might wonder if he cares about his chances of getting elected. If he did then maybe it's not so smart to say so.

    http://www.cnbc.com/id/45030263

    His plan would be a 20 percent flat tax which would preserve certain deductions and provide an exemption of $12,500 per person-it is claimed that would mean the first $50,000 of income would be untaxed. It would also:

 — Preserve deductions for mortgage interest, charitable donations, and state and local taxes on incomes below $500,000.

—Allow anyone to file under the current system if they choose.

     This last might seem to make it a wash. There is doubt that such a system could work very seamlessly. At best it would not be a tax increase for those of lower income who would do better under the current system. What it would do though is radically cut government revenue while it is already at anorexic levels and we are suffering a huge deficit:

      "Two things are clear: It will lose lots of revenue, and it will give a big tax cut to the rich," said Robertson Williams, a senior fellow at the Tax Policy Center, a think-tank joint venture of the Brookings Institution and the Urban Institute, both viewed as left-of-center.

       http://online.wsj.com/article/SB10001424052970204777904576653260196826074.html?mod=googlenews_wsj

       At a time of such a weak economy and huge deficit this is the wrong plan. Not that I can envision a scenario that it would ever be the right one.

       For the struggling American Mr. Perry has these inspiring words:

      "If you're looking for somebody that's going to nibble around the edges, if you're looking for somebody that's going to say, ‘Hey listen we're not going to make it hard on you, it's all going to work it out, and it's just, you know, kumbaya,’ I'm not your guy."

      Well I can't speak for anyone else but I'm not looking for someone to say "kumbaya" or nibble around the edges, which actually sounds like our current policy. Mr. Perry's snide sarcasm doesn't do much either. I don't want the kumbaya guy or the sarcastic guy. Who I want is not in the Republican field this year. He is promising however to nibble around the edges of Social Security by raising the retirement age. Kumbaya.