Rick Perry’s flat tax, at least according to the outside consulting firm the campaign hired, would do the following:
Under static scoring—assuming no growth impact from a more efficient, pro-investment tax code—the Perry Tax Plan (call it PTP-SS) would raise $4.7 trillion less than the Congressional Budget Office baseline forecast from 2014-2020. Of course, that forecast assumes all the Bush tax cuts expire, which is highly unlikely.
Under dynamic scoring, the Perry tax Plan (call it PTP-DS) would raise $1.7 trillion less than the unrealistic CBO baseline. But revenue would move above 19 percent—a historically high number—of GDP in 2019 and 2020.
As I mentioned, the Perry campaign compares its plan to the CBO baseline, which includes some $4 trillion of supposed revenue over ten years from the expiration of the Bush tax cuts. But even Obama says he wants to keep the $3 trillion in middle-class Bush tax cuts. Indeed, the CBO has an alternate baseline that includes more realistic policy assumption.
So if you compare the Perry Plan to an “alternate” CBO baseline that keeps the middle-class tax cuts over eight years (from 2014-2020)—this works out to $2.4 trillion, roughly—the Perry Plan only raises $2.3 trillion less in revenue under static scoring. And using mild dynamic assumptions that assume taxes actually influence economic growth—the Perry Plan actually increases revenue by $700 billion vs. the status quo.
