Governor Rick Perry made a very good point yesterday as he barnstormed talk shows to try to overcome his "oops" moment in Wednesday night's debate. He said: “This campaign is about ideas — not about who’s the slickest debater or whether anyone’s made a mistake or not.”
Of course, what he should have said is that the campaign should be about ideas, because it sure isn't about ideas as this precise moment.
Yesterday, in fact, was yet another missed opportunity to talk about Perry's ideas -- his very bad ideas -- as he showcased his tax plan. On his TV interviews, Perry brought along a mock tax form no larger than a postcard to show just much he would simplify the tax code with his optional flat tax. Too bad that none of the interviewers were all that interested in grilling him about the plan -- as opposed to asking inane questions about his gaffe, whether he'll stay in the race, and so on.
Americans could benefit from hearing more about Perry's tax plan, because it's a case study of how today's conservatives seems determined to worsen income equality. As you may have heard -- like, again and again -- a huge share of the income gains over the past three decades have gone to the top 1 percent. Inequality has been driven by a host of factors, and fiscal policy is definitely one of them. The wealthy have seen their tax rates, and tax burden, fall to historic lows since 1980.
Among other things, this inequality is bad news for the economy, because it concentrates purchasing power at the top of the income ladder, as opposed to spreading it out more evenly among ordinary consumers. Problem is, rich people only buy so much stuff before they have all they need. Extra cash just gets socked away into stocks, savings, and trusts. In contrast, middle income people tend to spend almost everything they have.
Perry's tax plan would make this problem worse. As Elon Green wrote here not long ago:
Tax Policy Center calculations show that very high income households across all file statuses would benefit from the Perry plan. For instance, a retired couple with an annual income of $722,060 could pay about $75,000 less under Perry's plan, while a working married couple with children making $31,000 would receive no bump at all under the plan.
Not only would lower income families get no break from Perry's plan, but the downsized government Perry envisions - he says he'd cap federal spending at 18 percent of GDP, or where it was in 1960 -- would mean deep cuts in programs that help those families.
In other words, the plan would not only put more cash into the hands of people who won't spend it, but result in cuts that would actually take cash out of the pocket of people who did spend in the form of lower entitlement benefits.
That sounds like a recipe for a permanent economic malaise. It also sounds like what we should really be talking about.