Republicans are the only ones spending much time today talking about a flat tax. Fortune columnist Geoff Colvin says this doesn’t have to be the case.
The injection of the flat tax into the campaign makes the issue bitterly partisan, which it should not and need not be. Perry is portraying his plan as a badge of true conservatism, distinguishing him from Mitt Romney; such positioning pushes the flat tax far to the right as an issue. President Obama, who has never concealed his fondness for redistributing wealth, wants to make the tax system less flat by imposing a surtax on those with incomes over $1 million, making flat-tax opposition a core value of the left. In the take-no-prisoners culture of today’s Washington, the odds of the two sides coming together on the issue are trending rapidly toward zero.
It was not ever thus. In the ’80s, Hall and Rabushka’s plan was endorsed on successive days on the editorial pages of the Wall Street Journal and the New York Times, making it the most bipartisan policy proposal since Congress created Mother’s Day. Before conservative Republicans Steve Forbes and Dick Armey pushed the flat tax in 1995, liberal Democrat Jerry Brown made it the center of his campaign for governor of California in 1992. Under cool analysis, a flat tax — done right — offers a lot for almost all to like.
Just don’t call it a flat tax. Call it a top-to-bottom overhaul that will put people to work, close loopholes that serve only certain corporations and the rich, make America more competitive globally, and improve life for people who work hard and save money. A flat tax, done right, can achieve all those benefits and more. Nor is it just theory. Several Eastern European countries have successfully used flat-tax systems for years.
