If his 2012 presidential campaign is any indication, former Texas Gov. Rick Perry will continue making a pitch in his 2016 presidential campaign for regressive tax policies and cuts in essential public services to fund tax breaks for the wealthy and corporations.
During his 2012 presidential campaign, Perry proposed to replace the individual income tax with a flat tax, at a rate of 20 percent. According to an analysis by Citizens for Tax Justice (CTJ), Perry’s flat tax plan would have cut taxes by an average of $272,730 annually for the top 1 percent of Americans, while reducing taxes by an average of $1,000 for those in the middle 20 percent.
This regressive tax plan would have exploded the deficit by $10.5 trillion in its first decade. While Perry did spell out some ill-advised program cuts, he never explained how he could possibly pay for a full $10.5 trillion in tax cuts.
Perry’s 2012 flat tax plan was essentially a call to replace our current federal tax system with something like the regressive and revenue-starved tax system already in place in Texas. That would be a boon for wealthy people at the expense of the vast majority of Americans.
His regressive federal tax proposals aren’t surprising based on his record as a three-term governor of Texas. During that time, Perry repeatedly demonstrated his support for tax cuts for the rich, even when it would mean tax increases—or reductions in public services—for low- and middle-income families.
One of Perry’s biggest talking points is touting Texas’s low taxes. In reality, however, Texas taxes are only low for the state’s wealthiest residents. According to the Institute on Taxation and Economic Policy (ITEP), the wealthiest one percent of Texans pay only 2.9 percent of their income in state taxes on average. In contrast, the bottom 20 percent of taxpayers pay, on average, as much as 12.5 percent of their income in state taxes, meaning they pay a rate that is four times higher than the state’s richest residents. Because of this, Texas’s tax system is one of the most regressive in the entire nation. For low-income families, Texas is actually the 7th highest tax state in the country.
While Texas’s tax system is tough on lower-income taxpayers, it’s a haven for businesses seeking corporate tax breaks and other handouts. A 2012 analysis using data from Good Jobs First found that Texas gives more special tax incentives for business, totaling around $19 billion annually, than any other state in the country. In other words, Perry is more than happy to let working families pick up the tab for billions in tax breaks for big corporations.
Building on this, Perry has worked in recent years to ensure that Texas and its local governments are perpetually unable to raise adequate revenue to provide funding for critical public services. For example, in 2012, Perry campaigned around Texas calling on lawmakers to sign his Texas Budget Compact, which included promising to oppose any new taxes or tax increases, as well as setting a constitutional limit on spending increases. In addition, he fought to tighten the state’s already debilitating property tax cap, a policy that would have made it even more difficult for local governments to adequately fund education.
Perry’s record on taxes is nothing to brag about. As a presidential candidate in 2016, he is likely to continue making the same pitch for the benefits of regressive tax cuts and reductions in essential government investments. Such policies are only good for corporations and an elite sliver of the population.