Grading PolitiFact *Liberal*-Style: Flat Tax Fever

Rick Perry's Tax Plan appears to have a different satirical pop culture twist than the “9-9-9” Cain Tax Plan: Herman Cain’s plan comes from the game SimCity 4, while Perry’s pandering “Taxpayer’s Choice” is not taken from anyone (except maybe Steve Forbes) and amounts to nothing more than maybe one of the Seven Dwarves: Dopey. Well, he was acting that way recently himself, so maybe there’s a connection.

According to Rachel Maddow, this plan “accomplishes the same goal of huge tax cuts for rich people and big tax hikes for everyone else." The “same” refers to Cain’s “9-9-9" Plan. PolitiFact’s verdict on the ruling:

Some other Americans--including 45 percent of residents earning $19,343 to $39,862--also would see tax cuts, a projection that does not support the claim that the plan means big tax increases for everyone but the wealthy. Perry’s plan allows every taxpayer to continue under the current system. No one would pay more unless he or she chooses the flat tax against their financial self-interest.

Maddow’s statement, leaving the incorrect impression that Perry’s tax plan hugely benefits the rich while everyone else pays more, rates Mostly False.

Here’s what FactCheck.org has to say about the Perry Tax Plan: (emphasis added)

But that’s not true for everyone, even though the Perry plan would result in a dramatic decrease in overall revenues, according to the Tax Policy Center analysis. The Tax Policy Center predicts that Rick Perry’s “flat tax” plan would amount to a tax cut of $570 billion in its first year after enactment, compared with current tax rates. More than half the benefits would flow to persons making more than $1 million a year.

However, many lower-income persons and families would see taxes go up. That’s because, although Perry has said he would continue the “current” income-tax system for those who prefer it, the TPC said Perry’s plan seems to allow all the Bush cuts to expire on schedule, including lower marginal rates at the bottom.

As a result, either the new Perry flat tax or the “current” tax system (once the Bush cuts expire) would mean higher taxes for many, compared with what they would pay at current rates. The TPC projected, for example, that taxes would go up for 63 percent of individuals and families earning between $40,000 and $50,000 a year, for an average increase of $248 in 2015. For those earning between $20,000 and $30,000, the tax hike would be even more painful, amounting to an average of $462 in higher federal income taxes.

Based on this information we can conclude that the Perry Tax Plan:

• Creates a more regressive tax structure.
• Allows Bush tax cuts to expire: so those “in the 53%” not choosing the flat rate, would have to pay higher taxes marginally as a result.
• The selection of tax rates to use, if it’s a “one time no turning back” choice, could result in some taxpayers unfairly having to pay a lot more through no fault of their own (they can’t necessarily predict their own earning power).
• Would result in more than half the benefits flowing to those making more than $1 Million (per FactCheck.org above).
• Would dramatically reduce tax revenues by $570 billion, necessitating reductions in government spending, which would most likely be to low income assistance programs; in other words, those reductions would be passed to lower and middle income earners as a cost (read:  "taxes") who would have reduced or no services/assistance available.

So, we’ve established that the first part of Maddow’s statement is undeniably True; for the second part, there would not be as big of tax hikes for everyone else, but there would be tax hikes, and the revenue reductions would also indirectly lead to a heavier burden on those with low and middle incomes.  Maddow's use of the word "big" gets her into a bit of trouble, but not enough to make her claim mostly false.

So this is not a Mostly False.  Her statement "is partially accurate but leaves out important details or takes things out of context." It’s more like Half True to Mostly True.