Back when they were teaching gun safety to my generation, there was a term for people who ran or jogged while carrying a loaded weapon. The term was “idiot.” And back when we were learning basic geometry they had a book called Flatland that told a story set in a two-dimensional world. It was a place where everything was flattened and the people had no depth.
Welcome to Rick Perry’s Flatland.
As Robert Borosage notes, Perry jogs with a handgun and reportedly shot a coyote that threatened his dog. Typical Republican overkill: You can scare off a coyote by throwing rocks at it. And speaking of overkill, the gun-totin’ candidate’s new flat tax proposal looks like a desperation move, a way to win some attention back from Herman Cain’s headline-grabbing economic proposal.
“9-9-9,” meet “SOS.”
The political types tell us that a flat tax proposal makes for easy the messaging. It’s simple, different, and it promises immediate relief from something most people hate (filling out tax forms). Hmm … simple, different, and promises immediate relief. You know what else fits that description? Jumping off a bridge.
There’s been a lot of commentary on the flat tax’s policy implications. But what would the country look like a few years from now if it were enacted? Let’s pretend that the entire country has jumped off a bridge by electing Rick Perry, and as a result we’re all living in a place you might call “Flatland USA.”
Let’s take a look around our new home.
In Flatland USA, President Rick Perry was swept into office on a wave of disaffection over unemployment and stagnating wages. When Perry’s flat tax became law in 2013,corporate tax revenues plunged. Conservatives love to complain that the official corporate tax rate for the United States is “the second highest in the developed world,” as Perry put it when he announced his plans. (Our official tax rate is 35%, second only to Japan.) But corporations have so many loopholes, and such smart tax lawyers, that the average rate they really pay today is only 13.4%. That’s less than the average for industrialized countries, which is 16%.
In Flatland USA, Perry’s flat tax lowered the top rate but didn’t get rid of the loopholes. (I’m making that assumption because Perry wrote today that “Cut, Balance and Grow also phases out corporate loopholes and special-interest tax breaks to provide a level playing field for employers of all sizes.” In plain English, that bureacrat-speak means “Corporations will get an even bigger tax break now, and we’ll fix all those other loopholes … someday.” And you know what? Someday never comes.)
Anybody remember “Wimpy,” the old freeloader from the Popeye cartoons? “I’ll gladly pay you Tuesday for a hamburger today,” he’d say. In Rick Perry’s Flatland, Tuesday never comes – and his tax plan is “wimpy” on corporations.
The loss of corporate taxes in Flatland starved the government of the revenue it needed to provide basic services.
On the personal side, President Perry gave taxpayers a choice: They could keep the tax rates they have now, or pay a flat rate of 20% instead. So everybody who was paying above 20%, after including all their deductions, took the flat rate instead. That caused another radical drop in government income.
Who didn’t take the deal once Flatland USA was born? The 99%, who wouldn’t see any benefit from this plan – but could at least avoid getting a tax hike, at least for now, by sticking with the old plan. Who else? People who live largely on investment income – most of them quite wealthy – because Perry lowered the taxable rate for many kinds of investment income to zero.
This was a radical giveaway to the wealthy. Rick Perry loves to talk about how he misses the America that existed when he was born. How does the tax rate in Flatland stack up to that country he misses so?
The country that Rick Perry’s so nostalgic about asked more of its most fortunate citizens that Perry’s willing to do. And remember: These are the maximum rates, but the average rates paid by the highest earners were even lower than they appear in this chart, thanks to those zero-interest rates for capital gains.
What’s more, Perry’s new tax system used the same rate of taxation – zero – for income that US companies earned overseas. And that’s after allowing them to repatriate the profits they’ve already made – at the absurdly low rate of 5%. That had the dual effect of slashing Federal revenues and sending even more American jobs overseas.
Not that this was bad news for everybody who needed a job. It was pretty good for workers in Bangalore and Manila.
That explains all the breadlines and soup kitchens dotting the landscape in Rick Perry’s Flatland USA. Jobs? Not here, pal. After all, corporations were sitting on $2 trillion in cash before Perry got elected, because there was so much unemployment and wages were so frozen that people couldn’t afford to buy their products. No customers, no sales. No sales, no jobs.
Now, after a couple years of Flatland, corporations are sitting on two or three times as much cash. It would be even higher, but they’ve spent some of it hiring workers in India and the Philippines – to make products they can sell in Europe and Asia.
Nobody can afford to buy them here anymore.
A good day to die
Okay, says the time traveler. That explains all the working-age people on those breadlines. But why all the old people?
That’s simple. Perry’s plan also included sharp cuts in government spending – at least 25%. That meant slashing away at Social Security and Medicare. And Perry’s privatization scheme allowed people to invest in the stock market, which left millions of oldsters penniless after the “Perry crash.” What’s more, he began cutting benefits right away. That now-infamous 2011 editorial only promised to preserve benefits for current and near-term Social Security beneficiaries.”
What does “near-term” mean? President-elect Perry said “that’s for me to know and you to find out.” People retiring in 2016 found out.
The rise in elder poverty, combined with the loss of Medicare coverage, also meant a 13% increase in elder mortality. That’s because the decrease in mortality that took place when Medicare was created was quickly undone. But some old folks thought of it as a mercy, because it had gotten so hard to get by. And they didn’t want to be a burden on their kids, who have been struggling so hard themselves …
Max Max America
But wait, someone asks. This is a pro-business plan, right? How did it lead to a “Perry crash”? Easy: The same way that “pro-business” policies wrecked the economy in 2008. As the middle class died, demand for products dried up in this country. As the remaining regulations were rolled back, the lands and waters were soiled by a dozen BP-like disasters, costing trillions in economic losses. And without financial regulations, Wall Street went even crazier and crashed the economy again and again …
… until there was no money left to bail them out. That’s how the Perry Plan turned into the Perry Crash, and the Perry Crash became the Perry Depression. And meanwhile, cuts in spending meant that the country’s infrastructure continued to collapse.
Poverty-stricken Americans in Flatland navigate a landscape filled with danger, as crumbling bridges and collapsing buildings threaten their safety and rolling blackouts and water failures leave them thirsty and in the dark more and more of the time.
Ghost of Economies Future
That’s how the USA became Flatland, a dreary Mad Max landscape of poverty and deprivation with no hope for the future.
But wait, someone asks. There was a line from Dickens, from A Christmas Carol, and it went something like this: Are these the visions of things that must be, or that might be only? Tell us, oh spirit of economies to come! Is this bleak world of Flatland really our future?
But like the spectral ghost of Christmas Future, our shrouded figure can only lift a bony finger in warning … before shooting itself in the foot. “Ow! Damn it all to heck. That hurt!”
The moral of this story? People who are holding loading weapons shouldn’t run … for anything.