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: