Texas Gov. Rick Perry calls for a flat tax

[October 20, 2011]  LAS VEGAS (AP) -- Working to distinguish himself from rival Mitt Romney, Texas Gov. Rick Perry said Wednesday that he wants to scrap America's current tax laws and impose a flat tax.

Perry told the Western Republican Leadership Conference he plans to explain the tax proposal when he unveils his broad economic plan in a speech next week.

He called the plan "an economic growth package that will create jobs, create growth and create investor confidence in America again."

"It starts with scrapping the three million words of the current tax code, and starting over with something much simpler: a flat tax," Perry said.

"I want to make the tax code so simple that even Timothy Geithner can file his taxes on time," he joked, referring to the Treasury Secretary and his late payment of $34,000 in payroll taxes last decade.

Perry's proposal is dramatically different from Romney's tax plan. Romney would lower the corporate tax rate and lower taxes on savings and investment income. He says his long term goal is to "pursue a flatter, fairer, simpler structure."

A flat tax applies the same tax rate to income at every level. The current tax code is progressive, taxing higher incomes at higher rates and lower incomes at lower rates.

Critics across the political spectrum complain that the current tax code is too complex and riddled with loopholes that allow specific groups to pay less. Many conservatives argue a flat tax would be simpler and fairer because everyone would be taxed at the same rate. Liberals and many moderates say a flat tax would make the tax system more regressive, giving big tax breaks to the wealthy while making low- and middle-income families pay more.

Perry didn't provide any more details for his flat tax proposal. In his book, "Fed Up!" he suggests the flat tax as a possible policy prescription but doesn't elaborate.

"One option would be to totally scrap the current tax code in favor of a flat tax, and thereby make taxation much simpler, easier to follow and harder to manipulate," Perry writes in his book. "Another option would be to repeal the Sixteenth Amendment to the Constitution (which authorizes the taxation of income) altogether, and then pursue an alternative model of taxation such as a national sales tax or the Fair Tax."

[Associated Press; By KASIE HUNT]

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