Seeking to boost a candidacy that has plummeted in opinion polls, Texas Gov. Rick Perry on Tuesday proposed overhauling the federal tax code with a single 20% rate for corporate and individual income tax — if taxpayers choose to pay it.
Perry's plan would give taxpayers the option of paying their current tax rate, which varies by income level, or the 20% rate. The single-rate plan would keep deductions for mortgage interest, state and local taxes, and charitable donations for those earning less than $500,000 a year. The plan wholesale jerseys from chinawould raise the standard deduction to $12,500 per person and eliminate the estate tax and capital gains tax.
Perry said he would balance the federal budget by 2020 and cap government spending at 18% of gross domestic product. That would require cutting up to $1 trillion from the annual budget.
"America is under a crushing burden of debt, and the president simply offers larger deficits and the politics of class division," Perry said. "Others simply offer microwaved plans with warmed-over reforms based on current ingredients."
Sweeping tax proposals, however, are a staple in the Republican policy pantry.cheap nhl jerseys Millionaire publisher Steve Forbes used a 17% flat tax proposal as the centerpiece of his presidential campaigns in 1996 and 2000. In 2008, former Arkansas Gov. Mike Huckabee proposed abolishing the income tax in favor of a 30% sales tax. In the current campaign, Herman Cain wants a 9% income tax, corporate tax and sales tax, and former House speaker Newt Gingrich wants a 15% income tax. Former Massachusetts governor Mitt Romney has a 59-point economic plan, and former Utah governor Jon Huntsman would set only three tax rates and eliminate all deductions.
Perry's proposal won qualified approval from conservative tax reform organizations. Club for Growth President Chris Chocola said a flat tax would "unleash years of economic growth" and that eliminating the capital gains tax "would immediately add trillions of dollars in new wealth to the economy, benefiting all Americans."
But Perry's opt-out provision means the plan will pull in far less revenue than the current tax code, said economist Alan Viard of the American Enterprise Institute. Perry's proposed spending cuts are not enough to offset the loss, sending the deficit higher, which he called a "fatal flaw." Because taxpayers will have to calculate which plan is cheaper, it's hard to argue that the plan reduces the complexity of the tax code, he said.
Taxpayers will obviously choose the plan that requires them to pay less in taxes; nba jerseys cheap "it guarantees the plan to be a revenue loser," Viard said. "For people at the top, the Perry plan just has to be better, so they will clearly opt into it."
At a news conference Tuesday , Perry said the tax plan is intended to spur job growth but didn't argue with the premise it would benefit the rich. "If folks who have money are going to be creating those jobs, I don't have a problem in the world with that," he said.
Democrats including the Obama campaign and Democratic National Committee Chairwoman Rep. Debbie Wasserman Schultz, of Florida, said Perry's plan would benefit rich Americans at the expense of the poor and middle class.
"It's a massive tax break for the wealthiest Americans," said Robert Borosage of the Campaign for America's Future, a liberal advocacy group. "It's a kind of Christmas tree list of conservative ornaments, but the result is to make our taxes even more regressive, to reduce the revenue we needNFL Jerseys Cheap to rebuild the country, and to savage both Medicare and Medicaid and Social Security."
As a political move, the flat tax proposal is designed to put Perry to the right of chief rival Romney, and put Romney "in the status quo box," said Larry Sabato, director of the University of Virginia's Center for Politics. "This serves his fundamental campaign purposes, and potentially solves his problems … because he's fallen far and it takes a lot to regenerate a candidate who's taken this kind of a dive."
Perry has fallen to fifth among GOP candidates, according to a poll released Tuesday.
Perry entered the GOP nominating contest on Aug. 13 on a wave of enthusiasm from Republicans, but after four televised debates in which he sometimes seemed at a loss, his standing in opinion polls has plunged: The CBS/New York Times poll placed Perry fifth among Republican candidates, with 9% supporting him compared with 25% for Cain and 21% for Romney. In the same poll on Sept. 16, Perry led the field with 23% support among Republican primary voters.
Iowa caucusgoers will scrutinize Perry's proposal closely, says Steffen Schmidt, political scientist at Iowa State University. "I think Perry is going to get a lot of pushback on this within his own party, and that will muddle up things when he comes to sell it wit Iowa voters,'' says Schmidt, who calls the plan "not sufficiently sexy. It doesn't grab you, and it has some things in it that are probably somewhat disturbing to even Republican constituencies."
The Perry plan touches on entitlement programs such as Social Securitycheap nfl jerseys and federal spending and calls for a review of federal regulations, including repeal of the Dodd-Frank law that imposes restrictions on Wall Street.
"The flat tax will unleash growth, but growth is not enough," Perry said today. "We must put a stop to the entitlement culture that risks the financial solvency of this country for future generations."
After being blasted by Romney and his rivals for saying Social Security is a "Ponzi scheme," Perry is fleshing out some of his ideas on the popular retirement program. He says he'll end the tax on Social Security benefits for older Americans and vows to put an end to raiding of the Social Security trust fund to pay for other federal programs.
For younger people, the Texas governor says personal retirement accounts will allow them to "seek a market rate of return" on their own contributions to Social Security and "leave their retirement savings to their dependents when they die."