The 2012 Republican Presidential contenders have held a series of 7 debates, starting in May with the final debate taking place on October 18th in Las Vegas, Nevada. While poll results and headlines have led to the rise and fall of certain candidates, with Herman Cain and Mitt Romney currently in the lead, the clear winner in the series of debates appears to be the Flat Tax.

The Flat Tax first appeared in modern times in a book by renowned economist Milton Friedman in his book “Capitalism and Freedom” in 1962. (A flat tax was imposed by Abraham Lincoln in 1861 to finance the Civil War but repealed in 1871.) From then until 1992 the flat tax was primarily the province of economists who suggested various implementations in books and articles.

In 1992, then California Governor Jerry Brown, interestingly enough the current Governor of California, proposed a flat tax in his campaign for the Democratic Presidential nomination. He called for a 13% tax on all personal and business income. In 1995, House Majority Leader Richard Armey and Senator Richard Shelby called for a flat tax at 17%. That same year House Minority Leader Richard Gephardt introduced a 10% flat tax proposal which was countered by Sen. Arlen Specter with a 20% tax.

The flat tax again gained national prominence when Steve Forbes, publisher of Forbes magazine, made a 17% flat tax the centerpiece of his Presidential candidacy in 1996.
    

Today the flat tax is once again a highlight of the Republican debates with Herman Cain gaining prominence for his 9-9-9 flat tax plan. Rick Perry has proposed an alternative 20% flat tax, as has Jon Huntsman suggested one, without picking a specific percentage, and Newt Gingrich calling for a 15% flat tax.

Proponents of the flat tax point to it as an economic and political reform. Lower rates, it is said, would promote more domestic investment and increase growth leading to more jobs. Politically it would reform a corrupt system where lobbyists and politicians game the system to provide loopholes and special tax laws for special interests resulting in thousands of pages of tax regulation, 60,000 at last count, which costs Americans billions in compliance costs and results in unfair taxation.

Opponents of the flat tax include many of those same lobbyists and politicians but also some economists that point out the regressive nature of a flat tax that might hit the poor the hardest adding an additional tax burden on top of the already higher percentage of their income they pay in payroll taxes, sales taxes, and property taxes.

Most of the flat tax proposals that are currently being touted by the Republican candidates offer some measures, such as eliminating all taxes on the first $20,000 of incomes, allowing some deductions, such as the cherished mortgage deduction, or for charitable giving to make the regressive nature of a flat tax more progressive.  

While Americans are still making up their minds about who will be the Republican nominee in 2012, its clear that one of the deciding factors will be the candidates’ economic plan for growth. With unemployment at 9.1%, and real unemployment closer to 16%, inflationary pricing, and deficit spending at record levels, voters are clearly voting with their checkbooks.