Political Animal


October 28, 2011 8:40 AM Perry joins the Tax Fairy Fan Club

By Steve Benen

Republican presidential hopeful Rick Perry released his tax plan this week, and it’s a doozy. The Texas governor wants a flat tax, the elimination of the Estate Tax, and the elimination of the capital-gains tax. All of these measures, of course, would cost an enormous amount of money, and all of them would exclusively benefit the very wealthy.

At the same time, though, Perry believes he can slash taxes on the rich while also eliminating the deficit and balancing the budget. I seem to recall another dimwitted Texas governor making the same promise about a decade ago.

And how, pray tell, does Perry intend to collect more revenue by collecting less revenue? The governor’s campaign provided Suzy Khimm with an explanation. From the Perry camp:

“The purpose of this bold tax proposal is to give the economy the jumpstart it needs to get people back to work. The flat tax system has been designed to raise total federal revenues equal to 18 percent of GDP, the 50-year historical average for tax revenue in the U.S. Gov. Perry is confident that the economic growth that results from this plan will generate the necessary revenue to balance the budget by 2020.”

Yes, Perry is apparently a member of the Tax Fairy Fan Club. If you cut taxes, the argument goes, the economy will soar, more people will get better jobs, they’ll start paying taxes on their income, and voila, more revenue enters the treasury. As far as the governor’s campaign is concerned, they’re “confident” that massive tax giveaways to millionaires and billionaires will simply pay for themselves.

And if the oft-confused Texas governor is confident, who are we to question him?

Look, this truly absurd argument comes up fairly regularly, but it’s deeply foolish. Earlier this year, Amanda Terkel noted that actual economists, even conservative ones, have no use for this nonsense.

“Federal revenue is lower today than it would have been without the tax cuts. There’s really no dispute among economists about that,” said Alan D. Viard, a former White House economist under George W. Bush, in a 2006 Washington Post article.

Robert Carroll, deputy assistant Treasury secretary for tax analysis, also said that no one in the administration believes tax cuts created a surge in revenue. “As a matter of principle, we do not think tax cuts pay for themselves,” Carroll said.

Bruce Bartlett, a Reagan economist who became a strong critic of the Bush administration’s policies, used data from the Office of Management and Budget in a blog post last year to illustrate how “the Bush tax cuts reduced revenue rather significantly.”

Republicans like Perry aren’t just wrong about this; they’re pathologically confused. The evidence isn’t ambiguous in the slightest. The idea is just crazy.

Steve Benen is a contributing writer to the Washington Monthly, joining the publication in August, 2008 as chief blogger for the Washington Monthly blog, Political Animal.


Post a comment
  • Live Free or Die on October 28, 2011 8:51 AM:


    I hate when you use the term oft-confused to describe liars. But in Perry's case, I think you are right.

  • c u n d gulag on October 28, 2011 8:57 AM:

    What the definition of insanity again?

    I mean, besides voting for Conservatives/Republicans.

    Oh, yeah, doing the same thing over and over again, expecting a different result.

    Like I said - voting Republican.

  • Mike R on October 28, 2011 9:05 AM:

    The people who propose these tax plans aren't confused, these plans do exactly what they expect. They line their own pockets with money, which is the result they are looking for.

  • nitpicker on October 28, 2011 9:07 AM:

    See also: This Planet Money podcast in which American Enterprise Institute economist Allen Viard says, "The one myth which we certainly should reject is the notion that the incentive effects are going to be big enough so that tax cuts fully pay for themselves...That's simply not a realistic outcome for broad-based taxes. Not even remotely."

  • nitpicker on October 28, 2011 9:11 AM:

    Links don't work?

  • Rick Taylor on October 28, 2011 9:14 AM:

    By now, I don't feel the least bit of surprise when a top tier candidate to be the Republican nominee for President proposes something completely outlandish with no basis in fact.

  • berttheclock on October 28, 2011 9:20 AM:

    His proposal, as well as the 9-9-9 or 9-0-9 plan are one in the same. They are not Fairy Tales, they are Scary Tales as they are designed to destroy the government. They are Grover Norquist on steriods. David Stockman spoke of the Reagan cuts being the method used to eliminate money for social programs. Those plans were in pre-school compared to what Perry, Cain and Norquist wish to do. Anarchists could not achieve better.

  • DAY on October 28, 2011 9:32 AM:

    In a brilliant move, Perry says he will no longer attend the debates, foiling the pathetic attempts of his rivals to scoff at his so-called "tax plan".

  • biggerbox on October 28, 2011 10:57 AM:

    By similar 'logic', if you jump off a six story building, you should be able to fly, since the speed of the wind will pick up as you hurtle toward the ground, and the high-speed wind will lift you up, maybe even higher than the level you started on!

    I don't propose anyone actually try doing this.

  • Rick Massimo on October 28, 2011 11:33 AM:

    "If you cut taxes, the argument goes, the economy will soar, more people will get better jobs, they’ll start paying taxes on their income, and voila, more revenue enters the treasury."

    Even if that were true, notice the effect: The workers are paying the taxes that the bosses no longer pay. Convenient!

  • edr on October 28, 2011 11:55 AM:

    Perry knows this idea will never fly.The Americam electorate likes things simple. They like the idea of a flat tax. They do not know that it will never work.

  • Marko on October 28, 2011 12:56 PM:

    Republicans like Perry aren’t just wrong about this; they’re pathologically confused.

    No, they're just trying to fleece the flock, again. And all the sheeple went, "bah!"