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The true intent of Rick Perry's tax plan
Policy wonks warn that Rick Perry's flat-tax plan is pure fantasy. But that's not a bug. It's a feature
 
David Frum
David Frum

Perhaps you've had this experience:

You're in a Chinese restaurant and you glimpse something exotic at the next table.

"What's that?"

The waiter answers, "It's not for you."

You insist, the dish arrives, and lo and behold, the waiter was right.

The policy wonks and tax experts now poring over Texas Gov. Rick Perry's new proposed alternative maximum 20 percent flat tax  need to understand the same message. The plan is not for them.

The wonks point out that (as conventionally scored) Perry's tax plan would blow a giant hole in the already huge federal deficit. The wonks also note that the Perry plan claims to balance the budget by 2020 only by (1) positing ferocious spending cuts unlikely to pass Congress and by (2) simultaneously assuming a sudden acceleration of U.S. economic growth upon adoption of the Perry flat tax plan.

These plans exist not as a basis for government, but as a device for campaigning; not to persuade experts, but to excite primary voters.

Assumption two rests uneasily alongside the major assumption of Perry's previously released jobs plan, which promises 1.2 million new jobs from energy production thanks to lighter regulation and a sustained increase in the price of oil and gas. The problem is that normally, periods of sustained increase in energy prices (the 1970s, the 2000s) see slower growth — even when taxes are cut substantially, as they were in the 2000s.

Assumption two also rejects the conventional economic assumption that big abrupt cuts in government are contractionary.

The wonks will therefore conclude that the Perry plans make no sense.

They are wrong! The plans make great sense — if you understand Perry's true purpose.

The Perry plans are not economic plans. They are primary-winning plans.

Rick Perry entered the GOP presidential race as the most credible in the field of Not Romneys. Perry then immolated himself in a series of debate gaffes, tumbling to fifth place in most national polls of Republican preferences.

Yet the opportunity Perry perceived before entering the race remains. There continues to exist a big Republican constituency for a credible Not Romney. That person is not Michele Bachmann. It is not Herman Cain. It briefly was Rick Perry — and if he can somehow overcome his debate stumbles, it could be Rick Perry again.

Perry is now acting shrewdly to revive his hopes. He has husbanded his money: As of September 30, he had more cash on hand than Mitt Romney.

He has now staked out the ultra-tax-cutting position that attracts the GOP's small-business spine.

He has aggressively winked and nodded at the birthers in a way that signals, "I'm not a paranoid nutcase, but I do agree with you that this Barry Sotero Hussein Obama is not a real American."

Over the weekend, Perry slapped Herman Cain hard for Cain's deviation from the strict anti-abortion position.

Perry has, in short, positioned himself as the most survivable repository of anti-Romney hopes in the GOP. And there are a lot of Republicans who hold such hopes. If Bachmann is forced to quit the race due to money and staff troubles, if the Cain train goes off the rails, if Newt Gingrich and Rick Santorum continue to exist as debate presences only, lacking campaign organizations — and with Palin and Christie staying home — then Perry can confidently expect to rise again.

The jobs plan, tax plan, and birther comments are all elements of the same plan. They are signaling devices. They announce: I'm still here. Despite the soft line on illegal immigration demanded by my big Texas donors, I share more of your values than that shape-shifting Mitt Romney. I'm the guy who will wage the most savage campaign against President Obama. Forget Cain. Come home.

So when economists and other pencil-pushers complain that Perry's plans don't add up — that they are founded on laughable assumptions and plain just don't make sense — those economists are not wrong exactly, just beside the point. On their own terms, the plans do make sense. They exist not as a basis for government, but as a device for campaigning; not to persuade experts, but to excite primary voters. So Mr. Numbers Man, when you test the Perry plans and reject them as unappetizing, just remember, you were warned: They weren't for you.

 

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