Whatever else comes out of the “scandal” over IRS scrutiny of 501(c)(4) applicants (and it’s already clear it will be harnessed to the GOP’s Great White Whale obsession with repealing Obamacare, on which the House will hold its 37th vote this week), one byproduct is certain. Sooner probably than later, we will see a resurgence of “flat tax” proposals, which have always advertised the abolition of the IRS as their most attractive feature.
Indeed, the conservative “base” may be ahead of the pols and bloviators on this one. If you Google “IRS Scandal Flat Tax” right now, you mostly turn up letters-to-the-editor and Freeper commentary (though the Atlanta Journal-Constitution’s conservative columnist Kyle Wingfield briefly mentioned it). But it’s going to be a bottomless crack pipe for talk radio types (who have always been the bedrock of support for flat-tax schemes, and will probably continue to be so now that Herman Cain is among their ranks) who view progressive income taxation as the ultimate enemy.
If I’m right, it will provide an interesting challenge for GOP congressmen, who have pretty much eschewed Big Tax Ideas for the smaller model of regressive taxation that involves lowering top rates and abolishing corporate taxation, and paying for it all by “closing loopholes” (many of which will inevitably affect the middle class). It would take something a lot more radical to enable the closure of the IRS. But since said congressmen aren’t really interested in reaching any sort of “grand bargain” with the Obama administration or congressional Democrats on taxes or fiscal policy generally, why not go the whole hog and give “the base” what it really wants?
The peril with “flat tax” schemes (or for the closely related “consumption tax” schemes), of course, is that they typically rely on significantly higher taxes for the poor and the middle class. They are ultimately not that different from the state-level GOP “tax reform initiatives” involving higher sales taxes combined with much lower or abolished income taxes that have gotten Bobby Jindal (and to some extent, Sam Brownback) in political hot water.
So federal-level conservatives may regret re-embracing “flat taxes” generally or some version of the “Fair Tax” specifically. But they probably won’t be able to help themselves in the current environment.
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