Tuesday, October 25, 2011
Institute Individual Flat Income Tax Rate of 20%
- Allow Individuals to Choose Existing Tax Code or Simple Flat Tax System
- Preserve Deductions for Mortgage Interest, Charity, and State/Local Taxes
- Include Standard Exemption for Individuals/Dependents of $12,500
- Standard Exemptions and Other Deductions are Phased Out > $500,000
Eliminate Tax on Social Security Benefits
Eliminate Tax on Dividends and Capital Gains
Eliminate Death Tax
No Federal Sales Tax or Value-Added Tax
Reduce Corporate Income Tax Rate to 20% to Enhance American Competitiveness
- Eliminate Corporate Loopholes and Special-Interest Tax Breaks
- Transition to a Territorial Tax System
- Allow Locked-Up Overseas Capital to be Brought Back to the U.S. at 5.25% Tax Rate
Wall Street Journal op-ed, My Tax and Spending Reform Plan, by Rick Perry:
The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate. The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents.
This simple 20% flat tax will allow Americans to file their taxes on a postcard, saving up to $483 billion in compliance costs. By eliminating the dozens of carve-outs that make the current code so incomprehensible, we will renew incentives for entrepreneurial risk-taking and investment that creates jobs, inspires Americans to work hard and forms the foundation of a strong economy. My plan also abolishes the death tax once and for all, providing needed certainty to American family farms and small businesses.
My plan restores American competitiveness in the global marketplace and provides strong incentives for U.S.-based employers to build new factories and create thousands of jobs here at home.
First, we will lower the corporate tax rate to 20%—dropping it from the second highest in the developed world to a rate on par with our global competitors. Second, we will encourage the swift repatriation of some of the $1.4 trillion estimated to be parked overseas by temporarily lowering the rate to 5.25%. And third, we will transition to a "territorial tax system"—as seen in Hong Kong and France, for example—that only taxes in-country income.
The mind-boggling complexity of the current tax code helps large corporations with lawyers and accountants devise the best tax-avoidance strategies money can buy. That is why Cut, Balance and Grow also phases out corporate loopholes and special-interest tax breaks to provide a level playing field for employers of all sizes.
To help older Americans, we will eliminate the tax on Social Security benefits, boosting the incomes of 17 million current beneficiaries who see their benefits taxed if they continue to work and earn income in addition to Social Security earnings.
We will eliminate the tax on qualified dividends and long-term capital gains to free up the billions of dollars Americans are sitting on to avoid taxes on the gain.
- ABC News, Herman Cain’s 9-9-9 Plan Challenged by Rick Perry’s Flat Tax Proposal
- Bloomberg, Perry’s Flat-Tax Plan: Simplicity Atop Complexity
- Len Burman (Syracuse), Everything You Need to Know About Perry's Flat Tax
- Forbes, Perry's Flat Tax: Some Missing Homework, But A Solid B+
- National Journal, Perry's Flat-Tax Proposal Unlikely to Please Anyone
- New York Times, Perry Plan Would Grant Big Tax Break to Wealthiest
- Politico, Rick Perry Flat Tax Plan Wins Support
- Wall Street Journal, Perry Presses Flat-Tax Plan
- Washington Post, Perry’s Economic Plan Would Slash Taxes, Federal Spending on Programs
- Wshington Post, Poll: Conservatives Prefer Flat Tax Over ‘9-9-9’