Texas Gov. Rick Perry is trying to reclaim a spot atop the field of Republican presidential candidates with a proposal to replace the existing federal tax code with a flat tax, a move that allows Perry to directly challenge businessman Herman Cain, whose 9-9-9 tax plan has propelled him in the polls.
Cain has enjoyed a groundswell of support, particularly among the tax-cutting members of the Tea Party, in part because of his 9-9-9 tax proposal that would replace the existing tax code with a 9 percent tax on corporate and income taxes and a new 9 percent national sales tax.
While Cain is now running even or edging ahead of former Massachusetts Gov. Mitt Romney in the polls, Perry has dropped from his front-runner position to a distant fourth.
Perry will detail his plan for a flat tax next week, but previewed the proposal in a speech this week to the Western Republican Leadership Conference in Nevada.
“In six days I’m going to release a plan that will create jobs, create growth and create investor confidence in America again,” Perry said. “It starts with scrapping the 3 million words of the current tax code and starting over with something simple — a flat tax.”
Former Nevada Gov. Bob List, a conference co-chairman, said Perry’s speech on the flat tax went “extremely well” and that his flat tax plan will likely garner a lot of interest among GOP voters.
“I think people are fed up with our current tax structure,” List said. “It is so complex and misunderstood in some ways and it would be great if we could have a simplified system that’s fair. … I’m anxious to hear the details.”
Perry’s tax plan will help draw a contrast between his fiscal policies and those of Romney, who in the past has come out against the flat tax and ran an ad against such a proposal in 1996.
Perhaps more importantly, Perry’s flat tax proposal could help win over some of the voters he lost to Cain. Despite its popularity, Cain’s tax plan has drawn criticism from some conservatives and economists who believe it would open the way to future tax increases.
“The hesitation about the 9-9-9 plan comes from the sense that there is this genetic predisposition to not only tinker with the tax but to make it worse, to incrementally increase the rate,” said Mike Franc, vice president of government studies for the Heritage Foundation, a conservative think tank.
Franc said the flat tax idea would not provide an avenue for future increases and “is a smart move,” for any of the candidates to propose, given its long history of acceptance within conservative political circles, in particular among conservative icons like President Reagan and Jack Kemp.
“Where Perry is going I think would be reflecting the kind of thought processes that have been going on in the conservative movement for a long time,” Franc said.
