Most flat tax proposals have a lot of fiscal and political problems, but as Fareed Zarakia argues in our new issue, they do have certain theoretical virtues. One of them is the elimination of tax loopholes, whose creation and perpetuation are the stock in trade of many Washington lobbyists. These loopholes don’t just undermine economic efficiency, they also corrupt our political system as lobbyists dole out campaign contributions in exchange for lucrative tax breaks. As Fareed puts it so nicely, “In other countries, this sort of bribery takes place underneath bridges and with cash in brown envelopes. In America, it is institutionalized and legal…”
Recent Republican advocates of tax reform have presented it not just as a way to simplify tax season for regular Americans, but as a weapon to fight the Washington lobbying machine and limit institutionalized corruption. John McCain hammered at this theme when he ran as a tax reformer in 2000, fixating on the influence of “special interests” in Washington. So did Steve Forbes, who helped design Perry’s plan, during his 1996 and 2000 presidential campaigns. Forbes liked to say that his plan would “drain the swamp” of Washington and kill the “mosquitoes” (i.e., lobbyists) that the city breeds by the thousands.
While Rick Perry’s flat tax speech on Tuesday struck these notes–”My plan closes corporate loopholes, ends the special breaks for special interests, and stops the gravy train of lobbyists and tax lawyers at the Washington trough,” he said–his primary emphasis lay elsewhere. Perry focused more on simplicity for taxpayers, showing off a post card on which people could file their returns if they choose (his plan would be a voluntary alternative to the current system), and on the creeping influence of the Washington bureaucracy: “We need tax policy that embraces the world as it is, and not what liberal ideologues wish it to be.” In the end, those lobbyists and special interests warranted just a couple of mentions, and Perry made no effort to assemble a larger case about the culture of Washington or the special interests’ role in it, or even what sort of special interests he was talking about.
It’s not hard to imagine why Perry chose not to attack K Street. He may not want to spoil a lucrative source of campaign money, for one thing. (Steve Forbes was a largely self-financed candidate; in 2000, McCain relied on donations from outside the D.C. machine.) Perry also appears very cozy with lobbyists himself, albeit in Austin.
But there’s something more to it. Little more than five years after the Abramoff-DeLay scandals exposed the sleazy underbelly of Washington lobbying, the Republican presidential candidates have almost nothing to say about the pervasiveness and corrupting effect of influence-peddling. In the Republican worldview, Jack Abramoff has been replaced by the likes of Ben Bernanke and Kathleen Sebelius as poster children for Washington’s problems. And while the Tea Party may rail against bank bailouts and corporate welfare, its leaders seem uninterested in regulating or restricting the army of lobbyists who play such an important role in guiding those vast sums of taxpayer money. With his passing mention of the subject on Tuesday, Rick Perry offered the latest piece of evidence that lobbying isn’t something movement conservatives care about.