Perry's proposal deviates from the flat-tax regime embraced by his advisor, the publisher and former presidential candidate Steve Forbes. Like the Forbes plan, Perry offers a single rate, eliminates taxes on investment income and provides exemptions for low-income taxpayers.
Flat-Tax Twist
Still, Perry is proposing a few twists on the flat-tax concept. By giving taxpayers a choice between systems, he avoids the kinds of tax increases for lower-income people that have led to criticism of rival Herman Cain's 9-9-9 plan for 9 percent income, business and sales taxes.
In the simpler system Perry proposes, he would retain tax breaks for mortgage interest, charitable contributions and state and local taxes for people earning less than $500,000 a year. He also would end taxation of Social Security benefits.
"He's just taken the fear out of tax reform," said Grover Norquist, president of Americans for Tax Reform, a small- government group in Washington.
Such efforts usually involve politicians making changes that leave taxpayers fearing that they will get hurt, he said.
Other Republican Plans
Other Republicans, including Ryan and presidential candidate Newt Gingrich, have offered optional tax system proposals.
Ryan's plan wouldn't allow taxpayers to make an annual choice between the systems. Instead, his proposal would require individuals to choose the current system or a simpler system within 10 years and then switch only once in their lifetimes or upon a major event such as marriage or divorce.
Perry's description of his plan doesn't say how taxpayers would choose between the systems or whether they could reverse their decisions. Campaign spokesman Mark Miner didn't return an e-mail yesterday requesting an answer.
Allowing annual choices wouldn't make the system much simpler, because taxpayers would have to calculate their liabilities both ways. Preventing taxpayers from switching tax systems could lock them into a less preferable option if their personal finances change.