Rick Perry announced his tax plan in an op-ed article in the
Wall Street Journal today. Here are the
key features:
Provides Americans with a choice between a 20% federal flat
tax or continuing to pay federal taxes at their current tax rate.
Preserves mortgage interest, charitable and state and local
tax exemptions for families earning less than $500,000 annually.
Increases the standard deduction to $12,500 for individuals
and dependents.
Abolishes the estate tax.
Lowers the corporate tax rate to 20%. (Temporarily lowers
the corporate tax rate to 5.25% to encourage corporations to repatriate money
parked overseas to avoid corporate tax.)
Only taxes corporations on in-country income.
Eliminates the tax on Social Security benefits.
Eliminates the tax on qualified dividends and long-term
capital gains
Establishes goal of balancing the budget by 2020.
Caps federal spending at 18% of our gross domestic product.
Bans earmarks and future bailouts.
Calls for passage of a Balanced Budget Amendment to the
Constitution.
Freezes federal civilian hiring and salaries until the
budget is balanced.
Puts an immediate moratorium on pending environmental, workplace
and other federal regulations and provides a full audit of all regulations
passed since 2008 to determine their need, impact and effect on job creation,
i.e. find an excuse for repealing most, if not all protections put in place by
the Obama administration.
Increases the number of uninsured and puts more Americans at
risk of becoming uninsured by repealing ObamaCare.
Deregulates Wall Street and ends consumer protections from
corporate abuse by repealing Dodd-Frank.
Abolishes the Sarbanes–Oxley
Act of 2002 to make it easier for publicly corporate to lie to investors on
their financial statements.
Ted Gayer, the co-director of the Economic Studies program
and a Senior Fellow at the Brookings Institution says Perry’s plan would “add up
to a 'substantial' decrease in revenues. CBS news notes that by making the 20% flat
tax optional, Perry provides a significant tax break for the rich with a
current 35% marginal tax rate while allowing middle income and poor Americans
to continue to pay at a lower rate.
Perry claims his proposal makes the tax system really simple. But, says Gayer, Perry’s proposal “kind of
undermines the whole we're making your taxes simpler argument, because you
still have to go through both systems to see which one is best for you,"
said Gayer.
Prediction: Independent
analysts will find that if implemented Perry’s plan would fall far short of generating the
minimum revenue required even with budget cuts that went far beyond even Tea
Party Republicans have previously proposed.
Perry’s plan is Dead On Arrival.
See the following links for more on Perry’s tax proposal:
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