There are many problems with both Perry and Newt’s tax plan.
The various flat tax plans are an attempt to hijack the reform movement without actually reforming the tax code in a substantive fashion.
Both plans are “what do I need to say to get votes” plan rather then “what do we need to do to fix the tax code” plan.
Neither broaden the tax base thus leaving the current system of payers and payees in play for future political exploitation.
They keep in place the corrupt practice of playing favorites in the tax code by still granting special exemptions. This is the greatest flaw in the Flat Tax plans. They leave in the politically popular exemptions to pander to certain voter blocks. It the best example of where the Flat Tax plans are not serious attempts to address the fundamental problems in the tax code but a political gimmick designed to rejuvenate flagging campaigns.
The Flat Tax maintains the current focus on taxing income instead of consumption thus punishing the producers at the expense of the users.
It leaves in place the current ability for trust funds and the massively wealthy to avoid paying any tax by structuring their payouts in forms other then income.
It does nothing to tap the underground off the books economy.
So while the Flat Tax is an improvement over the current system, it is merely tinkering with the existing tax code while leaving in place the same corrupt, flawed foundation.
Of the various tax plans, Cain’s 9-9-9 is the much better plan
I would make one change, to replace the corporate INCOME tax with a Gross Receipts tax. That would eliminate the need to calculate a TAXABLE INCOME for corporations, which should remove a large temptation to tinker with the definition of expense and income. That by itself would help keep the IRS smaller (or whatever would replace the IRS, because taxes don't pay themselves.)