Rick Perry’s Tax Compliance Nonsense

Making taxes simpler sounds great. But the reason taxes are complicated is that people like to try to take advantage of deductions and loopholes. You make things simpler by eliminating the deductions and loopholes, which will make some people sad. Rick Perry deals with this by saying that his new plan will be voluntary by “giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate” though he still “preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually.”

Clearly what he’s done here is make the tax code much more complicated, keeping everything about the current system in place and larding on a whole new tax code. Yet strangely, he still says this “will allow Americans to file their taxes on a postcard, saving up to $483 billion in compliance costs.” Reihan Salam rightly calls this claim “absurd,” noting that “Americans will presumably have to determine their tax liability under the current tax code and under Rick Perry’s new ‘flat’ tax code.”

Exactly so. Now I guess it’s true that there’s a decently sized class of people who are rich enough that it’s obvious Perry’s plan is better for them. If you’re a lawyer earning $450,000 a year who owns an expensive condo in high tax DC, Perry is clearly offering you a gigantic tax cut. But your average middle class family now just has to calculate their taxes twice.