The New York Times notes that multiple Republican presidential candidates have proposed some variation of the flat tax. This, along with Huckabee’s FairTax, has James Pethokoukis worried. I don’t think that any of these plans are going to get very far.
Whether it is a flat tax, or the FairTax, you still have the distributional and revenue problems. Who is going to get a tax cut and who (if anyone) is going to get a tax increase? How will the proposal impact the budget?
Republican presidential primary voters are a pretty responsible and prudent bunch for the most part.* They aren’t going to like a tax proposal if it increases taxes on the middle-class and the poor. Republican primary voters might be for lower spending relative to the Democrats, but they are still going to want to fund a strong defense and some kind of reformed Social Security and Medicare (and also the long-term care portion of Medicaid).
The flat tax, the FairTax, and gimmicks like Herman Cain’s 9-9-9 all share the weakness that the Republican nominating electorate (much less the median general election voter) are unlikely to support a tax plan that raises taxes on the middle-class and/or the poor and/or sharply decreases government revenues even as the American population gets older and the world gets more unstable.
The weaknesses of all these plans are all somewhat obscured in the year before the presidential primaries. The candidates supporting the flat taxes/FairTaxes/9-9-9s are all out talking about how their plans will be so simple and fair and boost the economy. Republican primary voters would like simple and, if it is fair, then those primary voters expect a tax cut (or at least no tax increase).
But it doesn’t end there. The other Republican candidates will expose the political and policy problems with the flat taxes/FairTaxes. When this happens, the candidates who support the more radical tax proposals will either start frantically modifying their proposals or flame out or both.
Supporting flat taxes and FairTaxes puts a ceiling on a candidate’s support. If you are a presidential candidate with such proposals, you can probably get by as factional candidate where people are voting for you despite not caring about your tax proposal, but supporting a flat tax or FairTax makes it much harder (and might make it outright impossible) to put together a coalition large enough to win the Republican nomination.
*Notice I wrote voters. Poll respondents during the silly season, some upset talk radio callers, and the loudest members of the Republican debate audience are a different matter. Michele Bachmann had some good polling numbers in Iowa back in 2011. She finished last in the Iowa Caucuses.