Rep. Pence calls for flat tax, warns of socialism

A top House Republican is touting a flat tax as the future of the American tax system, and suggested the nation is balancing on a wall between free market ideals and "socialism."

Rep. Mike Pence (R-Ind.), chair of the House Republican Conference, advocated for a simpler tax structure in a speech Monday at the Detroit Economic Club.

"The time has come for Congress and this administration to take bold action to simplify our tax system and lower people’s taxes," he said. "The best option, the most pro-growth option, is a flat tax. I believe it is time that America adopted a flat tax and scrapped the current system once and for all."

Pence, who is thought to be contemplating a run for the GOP presidential nomination in 2012, juxtaposed America's current position with what he saw during a trip to the Berlin Wall in the Cold War era.

"I saw the difference between East and West, between a free market economy and a planned economy run by the state. Freedom and personal responsibility contrasted with socialism and decline," he said, according to prepared remarks. "The problem with our economy today is that, after years of runaway spending and growth of government under both political parties, America is on that wall between West and East. ... I choose the West."

He also called for the permanent extension of the Bush tax cuts and a constitutional amendment that would limit federal spending to 20 percent of the nation's economy. He said every existing regulation with an economic impact of $100 million or more should be reassessed every 10 years.

Pence repeated the call for the repeal of a provision in the healthcare reform law requiring employers to file a Form 1099 for any purchases of goods or services above $600. 

He also stumped for an "all-of-the-above" energy policy and expressed optimism about reaching free trade agreements with Panama, Colombia and South Korea when Republicans assume a majority in the House next year.

Pence repeatedly cited President Reagan during his defense of free-market ideals.

"To restore American exceptionalism, we must end all this Keynesian spending and get back to the practice of free market economics. … The free market is what made America’s economy the greatest in the world, and we cannot falter in our willingness to defend it," he said. "We should remember what Ronald Reagan said — 'No government ever voluntarily reduces itself in size.' "