Jerry Brown's Silver Bullet

March 10, 1992

The folks who converted Ronald Reagan to supply-side economics have now turned another former California governor, Jerry Brown, into a flat-tax zealot. Whether the flat tax will prove as potent as supply-side economics in achieving presidential ambition is yet to be established. But Mr. Brown already has the satisfaction of having become a candidate to be reckoned with while Sen. Tom Harkin, the fellow who equated his idea with the "Flat Earth Society," is out of the race.

Actually, the idea of taxing all income with one all-inclusive rate and eliminating labyrinthine loopholes has been around for a long time. It has both conservative and liberal advocates in academia and in politics. But not until two Reagan-era supply side gurus, Jude Wanniski and Arthur Laffer, sold Mr. Brown on the idea did a presidential hopeful adopt it as his own "silver bullet."

So far, the candidate has made a bigger splash by condemning the heavily financed politics he once practiced himself and by putting himself forward as an anti-establishment figure. But the flat tax has appeal, given the fact that we have a tax code Jimmy Carter once described as "a disgrace to the human race." It may spur public discussion even if Mr. Brown never overtakes front-runners Bill Clinton and Paul Tsongas.

The Brown plan would impose a flat tax of 13 percent on all individual income and business income. Whether it would fall more heavily on the poor or the rich is a matter of hot dispute, but there is little doubt that more of the revenue stream would be provided by businesses and that income tax progressivity, an icon since the Wilson era, would be out the window.

In the mid-Eighties a step in this direction was taken when the Reagan administration worked out a deal with two leading Democrats -- Sen. Bill Bradley and Rep. Richard Gephardt -- to reduce income tax rates to only two brackets. George Bush, vice president at the time, never really accepted this departure from using the tax code to achieve social and economic objectives.

By the late 1980s, the supply-siders were trying hard to explain why dropping tax rates did not increase revenues, as they had predicted, but had produced federal deficits of monstrous proportions. So they focused their criticism on the 1990 budget agreement which, in attempting to increase revenues, retreated a bit from the 1986 reforms. And then they found Jerry Brown, ever on the lookout for a new political or spiritual panacea.

Mr. Wanniski has said he never dreamed Mr. Brown would be so bold as to accept what "strikes many people as a moonbeam idea." If so, then he hasn't been paying attention.

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