Times Warns Perry Tax Plan Would Send Us Back to 'Drastically Austere'...Clinton Years
The New York Times greeted Rick Perry's '20-20' flat-tax plan with predictable hostility. In Wednesday's 'Perry Calls His Flat Tax Proposal 'Bold Reform,' Richard Oppel Jr. took only two sentences to sniff 'the plan would grant a major tax cut for the wealthy'. He also saw it 'requiring drastically austere federal budgets,' of the sort we haven't seen since...well, President Bill Clinton, actually.
Gov. Rick Perry of Texas unveiled a plan on Tuesday to scrap the graduated income tax and replace it with a 20 percent flat rate. By throwing out rates as high as 35 percent and eliminating estate and investment taxes, the plan would grant a major tax cut for the wealthy. It is the centerpiece of an ambitious proposal that aims to overhaul political sacred cows like Social Security and Medicare while slashing the federal budget.
Mr. Perry, a Republican presidential candidate, said his proposal would also offer benefits to middle-class Americans by giving a $12,500 deduction for every member of a household while preserving exemptions for state and local taxes, mortgage interest and charitable contributions for anyone making less than $500,000. He said anyone could still file under the current code, and he also pledged to lower the corporate tax rate to 20 percent, from 35 percent.
But in proposing what he called 'bold reform' that may trim Social Security and Medicare benefits for many, Mr. Perry is also advocating potentially sweeping changes in entitlement programs that may open him to new lines of attack from Republican rivals, all at a time when polling shows many Americans want to see higher - not lower - taxes on the wealthy.
The plan also proposes reducing the scope of the federal government by requiring drastically austere federal budgets - compared with what exists now - that spend no more than 18 percent of the nation's gross domestic product, which analysts said would most likely force big cuts in government spending at almost every level. That would equate to a cut of one-quarter of the budget from 2011 expected levels, and it would mark the lowest level of spending relative to G.D.P. since the mid-1960s, though rising tax receipts during the roaring economy of a dozen years ago temporarily brought the level close to 18 percent.
Or to put it a less-slanted way, Perry's plan proposes a return to the'drastically austere federal budgets' of the Clinton administration: In 1999, federal spending was 18.5% of gross domestic product, compared to around 24% today.
Oppel used a left-of-center 'nonpartisan' group to claim Perry's plan would be a windfall for the wealthy. In contrast, he managed to accurately label Club for Growth as conservative.
Analysts said it would take time to examine the effects of the Perry plan. But Roberton Williams, a senior fellow at the nonpartisan Urban-Brookings Tax Policy Center, said: 'There are two things we can say with certainty: It will lower revenue and be a great benefit to the wealthy.'
Conservative tax activists like the Club for Growth say the Perry plan would spur economic growth, but many economists warn that if put in place immediately, anything that cuts the size of the federal government as severely as Mr. Perry's proposal would throw the nation back into a recession.
More lame sniping followed:
Analysts also immediately raised questions about how many people would actually see their taxes simplified, one of Mr. Perry's main claims: Many middle-class families would actually need to figure their taxes using both systems before deciding which one would save them more money, potentially increasing the amount of time they spend on taxes rather than making tax preparation easier.