"...Still, Perry is proposing a few twists on the flat-tax concept. By giving taxpayers a choice between the systems, he doesn’t remove complexity from the tax system and avoids the kinds of tax increases for lower-income people that have led to criticism of rival Herman Cain’s plan for 9% income, business and sales taxes.
In the simpler system Perry proposes, he would retain tax breaks for mortgage interest, charitable contributions and state and local taxes for people earning less than $500,000 a year.
No ‘Fear’ Reform
“He’s just taken the fear out of tax reform,” said Grover Norquist, president of Americans for Tax Reform, a small- government group in Washington.
Such efforts usually involve “a bunch of politicians in D.C.” making changes that leave a taxpayer fearing that “I don’t know, but I fear I’m going to get screwed,” he said.
With the choice offered by Perry, taxpayers will gravitate to the system that gives them the most benefits, Norquist said. Perry’s proposal doesn’t punish people who have organized their financial lives around tax breaks such as the mortgage interest deduction or the earned income tax credit, he said.
“It just strikes me as political pandering at its worst,” said Leonard Burman, a former Treasury Department official who now teaches at Syracuse University in New York. “It doesn’t seem like a serious policy proposal.”
Low-income taxpayers, who benefit from refundable tax credits for work and children that generate benefits in excess of their tax liability, might prefer the current system.
Perry, who has described himself as “dismayed at the injustice” that nearly Half of households don’t pay federal income taxes, wouldn’t change that number with his plan, Burman said."...
