If the Texas governor can't sell the idea more persuasively than Steve Forbes did, he could be in trouble
The last time a Republican presidential candidate proposed the sort of flat tax that Texas Gov. Rick Perry unveiled this week, the only thing it flattened was his own campaign.
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In 1996, magazine publisher Steve Forbes centered his bid for the GOP nomination on a proposal to replace the progressive income tax with a 17 percent single-rate flat tax that erased all deductions and eliminated taxes on all investment income such as capital gains and interest. The idea launched Forbes's unlikely campaign--and then swiftly deflated it. Perry has clearly shaped his proposal to blunt the political vulnerabilities that hobbled Forbes (who endorsed the Texas governor this week). But in the process, Perry has created some new targets for both the GOP primary and the general election, if he gets that far.
Early in the 1996 race, Forbes rocketed to the top of the GOP field behind a self-financed barrage of ads touting the flat tax. But he lost altitude almost as fast when rivals, led by Bob Dole and Lamar Alexander, perforated his plan.
In one raucous Iowa debate, Alexander derided Forbes's plan as "a truly nutty idea" that would crater the real-estate market and starve charities (by eliminating the mortgage and charitable deductions) while exploding the federal budget deficit. Around that time, a private citizen named Mitt Romney (two years off a failed Senate challenge to Edward Kennedy) bought full-page newspaper ads likewise denouncing Forbes's plan as "a tax cut for fat cats" because it taxed wages at 17 percent while exempting investment income. Dole then delivered the decisive final blow in New Hampshire, running powerful television ads in which then-Gov. Stephen Merrill, a Republican, charged that Forbes's plan "increases the deficit and raises our taxes." Ironically, among the key players in the Dole campaign that shredded the Forbes proposal were David Carney, now Perry's chief strategist, and Nelson Warfield and Tony Fabrizio, whom he hired this week as senior advisers.