The new Weekly Standard includes a Stephen Moore essay lauding the flat tax. In the course of it he says that he is working on a flat-tax plan with Senator Rand Paul that could feature a 15 percent tax rate. He presents the bipartisan 1986 tax reform as a model for this plan. He also criticizes the Lee-Rubio tax plan for not doing enough for growth, losing too much revenue, and raising tax rates on some people.
Some of that criticism seems to me unfair: Moore ignores the pro-growth aspects of the Lee-Rubio plan, which ought to make a supply-sider like it more than the 1986 reform. Lee-Rubio cuts taxes on investment, where the 1986 law raised them (which is a large part of how it got support from Democrats).
Moore’s article raises the prospect that the presidential primaries will include a useful debate about where conservative tax policy should go. It will be interesting to see what Senator Paul and Moore come up with. They may have some creative ideas to get around problems with previous flat-tax proposals. But I have my doubts about whether a flat tax could be free from the objections Moore raises against Lee-Rubio, or be as politically attractive as Moore suggests.
When Paul has discussed his coming plan in the recent past, it has sounded like a bigger tax cut, that would produce less revenue, than Lee-Rubio. A 15 percent flat tax could also expose many more millions of people to tax increases than Lee-Rubio does; and it seems highly unlikely to reduce tax bills for as many people as Lee-Rubio does. If the Paul plan leaves the payroll tax in place, it would also mean that middle-class families would face higher marginal tax rates than rich people.
That does not sound like the winning populist idea Moore expects it to be. But that conclusion may rest on different political assumptions than Moore makes. He believes that flat taxers should popularize the idea of ending the charitable deduction by calling it a giveaway for the rich. I am less convinced that starting a fight with nearly every charity in the country would make it easier for Republicans to win a presidential race. But maybe Senator Paul will find a way to make it work.