Family activist slams Perry’s flat tax plan over marriage

First, Mark Stricherz pointed out on the CV Blog the political danger of supporting a flat tax plan in a general election campaign. Then Ramesh Ponnuru wrote a similar article calling the flat tax “fools gold for conservatives.” Ponnuru summed up the mathematical problem rather succinctly: “[R]eplacing a progressive income tax with a flat tax necessarily means slashing revenues, raising middle-class taxes or both.” Simply put, this federal government is too huge to have just one flat tax rate on income. At least for now.

Neither Stricherz or Ponnuru are leftists who favor using the tax code to redistribute wealth. But both are Catholic and both think that tax policy should place families first. (In fact, Ponnuru wrote the CatholicVote white paper on taxes. It’s a quick read, worth your time.)

Now Phyllis Schlafly has a great article, which shows another flaw in the Perry plan. Her biggest complaint of the Texas governor’s flat tax plan is that it treats all adults merely as individuals, treating a husband and wife no different than an unmarried couple. And that’s a problem, she says.

Does Rick Perry want to undermine traditional marriage? This question leaps out from his new 20 percent flat-tax plan, which would eliminate all tax advantages for married couples where one spouse is the primary breadwinner.

For more than 60 years, the federal income tax has treated the family as an economic unit. A husband and wife have the benefit of pooling their income in a joint tax return, which affords larger deductions and lower rates.

Perry would replace the pooling of husband-wife income with a system in which each individual, regardless of marital status, would owe federal taxes on his or her separate income.  Perry’s plan offers “generous standard deductions of $12,500 for individuals and their dependents” — which ignores the fact that children are dependents of both their parents, even if one earns all or most of the family income.

If an income tax were truly “flat,” filing status wouldn’t matter because a wife is taxed at the same rate as her husband. But Perry’s so-called flat tax isn’t anywhere near flat, so it matters greatly that he offers the same standard allowances to alternative lifestyles as for married couples. His plan would allow, for example, two unrelated adults living with two children to avoid income tax on their first $50,000 of income.

Rick Perry wanted to use a flat tax to regain momentum for his lackluster campaign. With Cain’s catchy 9-9-9 plan, Perry had reason to think that tax reform might just be the answer. But given these very sound objections from Ponnuru, Stricherz, and Schlafly, I don’t think the flat tax will be his ticket back to the top of the pack.

Read the rest of Schlafly’s article over at Crisis Magazine.

UPDATE: One aspect that I do like about the plan is its very generous tax breaks for children. If Perry were to rectify his plans to address Schlafly’s concerns, and tinker with the rates to insure that the middle class don’t face tax hikes while keeping these generous deductions for children… well, I guess it would be a totally different plan, wouldn’t it?

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7 thoughts on “Family activist slams Perry’s flat tax plan over marriage

  1. Darren says:

    A flat tax holds great appeal to me in that it would remove a great deal of the government’s ability to try to socially engineer behavior via tax breaks. That’s one reason it would never be passed by any Congress. They won’t want to lose that control.

    But all this tinkering on the revenue side misses the larger point. By allowing themselves to be distracted by the revenue side of the equation (even if from the opposite end of the spectrum as Democrats), Republicans are ignoring the real issue that has to be addressed in any meaningful reform: spending. Without cutting spending, all the tax fiddling will be meaningless.

  2. MikeM says:

    If we’re chained to the idea of not raising taxes a penny on the middle or lower classes, we can’t have any meaningful tax reform. If you look at the ratio of our taxes on the rich to those on the rest of the income distribution, we already have by far the most progressive tax system in the world.

    Our income inequality problem, to the extent that we have one, has little, if anything, to do with our income tax structure. We need a tax code that encourages economic growth, and we won’t get there if we treat this as a zero sum game among the tax brackets.

  3. Louis says:

    I’d like to like this blog, as the post about Limbaugh was well thought out and very straightforward, but this post gives me pause.
    I find it hard to believe that in the space of two sentences you completely contradict yourself in such an embarrassingly amateurish fashion.
    I’m speaking, of course, to the part where you decry a flat tax as unjust because there are no breaks for families, and yet declare those who believe in a progressive tax (they very tax structure you just endorsed) as Leftist, and somehow not in keeping with Catholic thought.
    A tax that removes the burden from those struggling poor or families is by its very nature progressive, as a flat tax treats everyone the same regardless of circumstance… So either you are for a progressive tax and contradicted yourself, or you are merely spouting a poorly thought out quasi-Republican talking point and are trying to reconcile it with a viewpoint that places yourself above others.(families are the only institutions worthy of tax breaks!).

    1. Joe M says:

      Louis. Two points: A) A flat sales tax is also progressive as people with more money also spend more. B) Is it keeping with Catholic thought to insult people by calling them embarrassingly amateurish?

  4. Joe M says:

    Perry’s version is strange with the option, etc. However, I disagree with Mr. Ponnuru’s position as well. — I think that we have perhaps been mesmerized by years of class warfare rhetoric into thinking that the middle class is a sacred cow. That they are always different people than the upper or lower class. This is because class warfare logic only really works if you’re analyzing people as if time were frozen and people don’t move between groups more often than they stay in one their entire lives. Considering the reality of economic mobility, raising taxes on “the” middle class is more like asking people to chip in with taxes at a certain phase of their lives. — We can make it a rule to place as much tax burden on wealthy incomes as humanly possible. However, people in the middle class will feel economic problems just the same through avenues other than taxes (unemployment, inflation, rising prices, lowering salaries, unavailable credit, etc.). It’s a shell game to consider tax policy as if that is the barometer for how well off different groups of people are going to be over time. — Mr. Ponnuru says that it’s impossible to keep revenue the same without raising taxes on the middle class. I’m not sure if that is truly a supportable claim. However, assuming that it is, I would argue that would be more in line with Catholic Social teaching that each person is due payment as merited by their work. Our current tax structure says that the more successful a person is, the less payment they are allowed for the same work. I believe that there is evidence that a flat tax structure would solve a lot of the non-tax ailments that we face, making the US once again a more desirable place to set up business, creating jobs, lowering prices. — As far as the argument goes that treating people as individuals rather than couples for taxes: I think that if a couple is getting married for a tax break or that they can’t remain married unless they receive a tax break, something much more substantial is wrong with that picture than the tax code itself.

    1. fma says:

      There is very little class mobility in the United States. The rich stay rich, the middle class stays the middle class and the poor stay poor. So do their children. The very few people that change classes usually move down, not up. Hence the reason that over the past decade the poorest Americans have steadily increased in numbers while the middle class has shrunk.

      1. MikeM says:

        fma,
        Your comments are totally contrary the available data. The top 80% of American society has remarkable class mobility. The rich do not necessarily stay rich, and the middle class do not necessarily stay middle class. There’s very high mobility among those classes, with many getting richer and many getting poorer.

        It is true that within the bottom quintile of the income distribution, there’s fairly low mobility. But, that doesn’t stretch to the rest of Americans. We probably need to address the persistent lack of mobility among the poorest Americans, but if we ignore the facts and misdiagnose the problem, we can’t do that.

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