20%...Perry's Tax Plan
Perry is coming out today with his tax plan titled "Cut, Balance and Grow." The first data available is an op-ed by Perry in the Wall Street Journal. Key points:
- 20% flat rate which can be chosen by the tax payer
- continued deductions for mortgage interest, state/local taxes, charitable giving for those making less than $500,000
- 20% corporate rate, limited time 5.25% to drag money back to our shores
- Caps federal spending at 18% of GDP
- Federal hiring and pay freeze until budget is balanced
- Optional ownership of of social security accounts for younger workers
- Stops raiding of "trust fund" to maintain benefits for current and near SSI recipients.
Until the plan documents come out it will be hard to give a real opinion on it. I did really, really like one line from the piece though. Perry wrote, "President Obama and many in Washington seem unable or unwilling to tackle these issues, either out of fear of alienating the left or because they want Americans to be dependent on big government." That statement alone demonstrates an understanding of the fundamental issue we face in the left/right divide. Perry faces a very long and steep climb if he wants the nomination, but that attitude and some of the ideas from his jobs plan and his tax/spending plan should be incorporated in the administration of whoever puts Obama out of the WH.
Edit: From Jim Geraghty on NRO's Campaign Spot blog, "Perry’s team isn’t worried about the number of Americans who pay no federal income tax; they say the best way to resolve this is to get more Americans better-paying jobs." Good line, but someone's still gotta dig the ditches.
Update: Here's the plan.
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Jul '10
Re: 20%...Perry's Tax Plan
The King Prawn: ...
Demographics and depression level unemployment have accomplished this one. We may have already seen our last Social Security surplus, things have started sliding the other way.
Mar '11
Re: 20%...Perry's Tax Plan
If he keeps the mortgage, tax and charitable deduction and lowers rates to 20%, he's doing little more than rolling the tax code back to the Reagan 1982 tax act. Fundamental reform must bring more substantive changes than that.
I like the optional social security accounts for younger workers, but I'd couple that with an elimination of the minimum wage for anyone under 25. Spending caps and hiring/pay freeze works for me.
I've long supported the Fair Tax, and still do. However, the headwinds that Herman Cain's endured to gain traction for his 9-9-9 plan shows how difficult the idea is politically. If I were running for President, I'd say that if it hit my desk, I'd sign it, but it has to be passed as a grass roots effort. I'd not spend political capital on it.
Most people "pay" income taxes, it's just that the tax is offset by credits (earned income, education, energy, child, etc.) which have nothing to do with sound tax policy or administration. These give-backs must be decoupled from the tax system before people will start clamoring for true tax reform.
Edited on Oct 25, 2011 at 8:35amDec '10
Re: 20%...Perry's Tax Plan
Sisyphus
The King Prawn: ...
Demographics and depression level unemployment have accomplished this one. We may have already seen our last Social Security surplus, things have started sliding the other way. · Oct 25 at 7:07am
I imagine a couple of downward tics on the unemployment numbers will help, but it certainly won't stave off the collapse.
Dec '10
Re: 20%...Perry's Tax Plan
The line from the Geraghty piece has me rethinking the great number of people who don't pay into the system. I may have a little sympathy for those starting out who might honestly benefit from a leg up by not paying. However, the system now seems designed to encapsulate certain demographic groups for their entire working lives. It has gone from being a noble gesture to a dependency generator.
Oct '11
Re: 20%...Perry's Tax Plan
It's a solid foundation to start with. Anything that the government can do to shrink it's size and scope goes in the plus column.
Mar '11
Re: 20%...Perry's Tax Plan
It is an excellent start; it is the best economic plan by any candidate so far.
Dec '10
Re: 20%...Perry's Tax Plan
I'll post sniping shots about the plan as I read through it. The most immediate about the tax change:
Dec '10
Re: 20%...Perry's Tax Plan
If every single nominee makes some plan of how they would junk our current tax code central to their platform I would feel a lot better. Has Mitt issued a plan yet? This is really a big chance for him to win over conservatives.
Wow...just wow. That would be amazing. That would...just wow.
Edited on Oct 25, 2011 at 9:28amDec '10
Re: 20%...Perry's Tax Plan
Nyadnar17: If every single nominee makes some plan of how they would junk our current tax code central to their platform I would feel a lot better. Has Mitt issued a plan yet? This is really a big chance for him to win over conservatives.
Wow...just wow. That would be amazing. That would...just wow. · Oct 25 at 9:27am
One potential problem with the cap gains/dividends deduction is it might be possible to make enough money on investments to eliminate one's tax burden all together. That will get demagogued to death. What will be missed entirely is the magic number of $500K where the taxes go flat, no deductions. Talk about the rich paying their fair share...
Dec '10
Re: 20%...Perry's Tax Plan
"Cut, Balance and Grow"
[verbatim]
Lower and simplify tax rates
Cut spending
Balance the federal budget
Reform entitlements
Grow jobs economic opportunity
- repeal ObamaCare
- repeal Dodd-Frank
- repeal Section 404 of Sarbanes-Oxley
- immediate moratorium on pending federal regulations
- full audit of all regulations passed since 2008
Edited on Oct 25, 2011 at 10:23amApr '11
Re: 20%...Perry's Tax Plan
I like this enough to give Perry a second look, which is the best he could hope for given his performance so far. I would say that this has at least for me accomplished what was intended.
Apr '11
Re: 20%...Perry's Tax Plan
Wait 20% income tax what happens to the SS-tax? is it still there? I mean if your income tax falls lower than that you're not taking the 20% but keeping your current lower rate...that means he is only planing to lower top rates to 20%. I don't think that will fly since he is getting rid of the deductions and credits that most help low income workers, form what it seems.
Dec '10
Re: 20%...Perry's Tax Plan
I heard Fred Barnes this morning talking about how the candidates are only being judged on the debates currently (a point I've made before), and that there is much more to the campaigns than that. We'll see what becomes of Perry's chances. Currently he's running great on paper.
Dec '10
Re: 20%...Perry's Tax Plan
Cato's Dan Mitchell has a nice summary of Perry's plan and flat taxes in general. He give's Perry's plan a grade of B+. Comparing it to Cain's 999 plan, Mitchell says:
At a conceptual level, the plans are quite similar. They both replace the discriminatory rate structure of the current system with a low rate. They both get rid of double taxation. And they both dramatically reduce corrupt loopholes and distortions when compared to the current tax code.
All things considered, though, I prefer the flat tax. The 9-9-9 plan combines a 9 percent flat tax with a 9 percent VAT and a 9 percent national sales tax, and I don’t trust that politicians will keep the rates at 9 percent.
Dec '10
Re: 20%...Perry's Tax Plan
I'm not sure about the SSI and HI taxes. I don't see anything saying they would be replaced. The 20% really only kicks in for a family of 4 making over $50K/year. If they have a mortgage, give to charities, or pay state/local taxes then their taxable still gets reduced. This keeps some progressiveness, but the benefits to investment seem designed to help paper over that fact.
Mar '11
Re: 20%...Perry's Tax Plan
I like this better than 999, but I'm still gonna vote for Mr Cain - in practice, Mr Ryan will figure out the real tax plan.
Edited on Oct 25, 2011 at 12:09pmDec '10
Re: 20%...Perry's Tax Plan
From your lips to God's ears. And an extremely valid point. How open do you think the legislature is to suggestions from the executive? In the Pelosi/Reid/Obama love triangle (not get that image out of your head!) it seemed quite a lot.
Dec '10
Re: 20%...Perry's Tax Plan
For comparison, Romney’s 59 Policy Proposals:
Tax Policy
Individual Taxes
1. Maintain current tax rates on personal income
2. Maintain current tax rates on interest, dividends, and capital gains
3. Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains
4. Eliminate the death tax
5. Pursue a conservative overhaul of the tax system over the long term that includes lower,flatter rates on a broader base
Corporate Taxes
6. Reduce corporate income tax rate to 25 percent
7. Pursue transition from “worldwide” to “territorial” system for corporate taxation
Regulatory Policy
8. Repeal Obamacare
9. Repeal Dodd-Frank and replace with streamlined, modern regulatory framework
10. Amend Sarbanes-Oxley to relieve mid-size companies from onerous requirements
11. Ensure that environmental laws properly account for cost in regulatory process
12 Provide multi-year lead times before companies must come into compliance with
onerous new environmental regulations
13. Initiate review and elimination of all Obama-era regulations that unduly burden the economy
14. Impose a regulatory cap of zero dollars on all federal agencies
15. Require congressional approval of all new “major” regulations
16. Reform legal liability system to prevent spurious litigation
[con’t]
Dec '10
Re: 20%...Perry's Tax Plan
[con’t]
Trade Policy
Expanded Markets
17. Implement agreements with Colombia, Panama, and South Korea
18. Reinstate the president’s Trade Promotion Authority
19. Complete negotiations for the Trans-Pacific Partnership
20. Pursue new trade agreements with nations committed to free enterprise and open markets
21. Create the Reagan Economic Zone
Confronting China
22. Increase CBP resources to prevent the illegal entry of goods into our market
23. Increase USTR resources to pursue and support litigation against unfair trade practices
24. Use unilateral and multilateral punitive measures to deter unfair Chinese practices
25. Designate China a currency manipulator and impose countervailing duties
26. Discontinue U.S. government procurement from China until China commits to GPA
Energy Policy
Significant Regulatory Reform
27. Establish fixed timetables for all resource development approvals
28. Create one-stop shop to streamline permitting process for approval of common activities
29. Implement fast-track procedures for companies with established safety records to conduct
pre-approved activities in pre-approved areas
30. Amend Clean Air Act to exclude carbon dioxide from its purview
31. Expand NRC capabilities for approval of additional nuclear reactor designs
[con’t]
Dec '10
Re: 20%...Perry's Tax Plan
[con’t]
32. Streamline NRC processes to ensure that licensing decisions for reactors on or adjacent to approved sites, using approved designs, are complete within two years
Increased Production
33. Conduct comprehensive survey of America’s energy reserves
34. Open America’s energy reserves for development
35. Expand opportunities for U.S. resource developers to forge partnerships with neighboring countries
36 Support construction of pipelines to bring Canadian oil to the United States
37. Prevent overregulation of shale gas development and extraction
Research and Development
38 Concentrate alternative energy funding on basic research
39. Utilize long-term, apolitical funding mechanisms like ARPA-E for basic research
Labor Policy
40. Appoint to the NLRB experienced individuals with respect for the rule of law
41. Amend NLRA to explicitly protect the right of business owners to allocate their capital as they see fit
42. Amend NLRA to guarantee the secret ballot in every union certification election
43. Amend NLRA to guarantee that all pre-election campaigns last at least one month
44. Support states in pursuing Right-to-Work laws
45. Prohibit the use for political purposes of funds automatically deducted from worker paychecks
[con’t]