Conference call: Perry’s economic plan; Update: Club for Growth gives Perry plan thumbs-up

posted at 10:05 am on October 25, 2011 by Ed Morrissey

Earlier today, I sat in on a conference call to hear more about the Cut Balance and Grow plan from Rick Perry, which features an optional flat income tax for personal income, a 20% corporate tax and a shift to a “territorial” system, and a one-time repatriation rate of 5.25%.  Perry outlined his plan in the Wall Street Journal last night:

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.

The plan also includes an automatic sunset term for regulation, requiring Congressional renewal for all federal regulations, and forcing a “regulatory budget” onto agencies to limit their activities.  Perry’s team also pledged to treat the Social Security trust fund like the highway trust fund so that Congress can no longer raid it, and hinted at some level of privatization.

The campaign talked in broad strokes about entitlement reform, but not in detail, although it will be based on block-grant funding for Medicaid rather than top-down management.  They want a “long, open national debate” on reforming Medicare, rather than the closed process utilized by Democrats and Obama on ObamaCare.  Raising the retirement age will be part of that process, as will be the usual “waste fraud and abuse” hunting that is a perennial pledge on entitlements.

Perry will also provide “automatic government shutdown insurance” that will take seniors and the military out of the line of fire on budget battles.  Shutdowns would revert government spending to levels of the previous budget.

Questions:

  • [Questions garbled] – Budget balance by 2020 is in line with other conservative plans; took many years to get this out of balance, will take a few years to correct. BBA will not come into play immediately.  Tax exemptions could amount to $50K for a family of four, but economic growth will result in more taxpayers.
  • How do we get this bill through Congress? — “Now is not the time to be timid. …  Now is the time where you take bold steps.”  Don’t want just “a wink and a nod” at reform, like with other plans.
  • Why 20% when Forbes’ plan was 17%, and what are the income thresholds before tax liabilities occur? — We are proposing to preserve deductions for mortgage interest, charitable contributions, and state and local taxes, where Forbes didn’t.  Liabilities start at $12,500 per filer/dependent.
  • Doesn’t optional system still enable “crony” lobbyists? — People will probably shift rapidly to the 20% flat tax, so “we’d rather give people the option” and then think about phasing out the current system.
  • Corporate side – are we flattening that, too? — Besides getting credit for capital investments and R&D, all other deductions will be eliminated, and businesses will be taxed at 20% across the board.  “We want to send the message that America is open for business.”

I’m encouraged by this plan.  I think there are a couple of points to quibble over — I’m not a fan of making the flat tax optional on the personal side, as I think we have enough problems with one system, let alone two.  I agree that this issue will mainly take care of itself, though, as people flock to a system that’s simpler while still maintaining their mortgage interest deductions.  Having the exemptions for a family of four reach $50K keeps Democrats from demagoguing it as an attack on the middle class, too.  I’m most excited about flattening the corporate tax rate, where Congress creates the most mischief.

If anything could be a game changer for Perry, this could be it — assuming he can follow this up with better and more positive debate performances.  But even if it’s not the game changer Perry needs, this plan does look like the kind of game-changer that Republicans can use to keep the focus on the economy in 2012.

Update: The Club for Growth likes the Perry plan — a lot.  They also take a swipe at Romney:

“Rick Perry’s plan for tax reform would be massively pro-growth,” said Club for Growth President Chris Chocola. “A Flat Tax like the one proposed by Perry would unleash years of economic growth if it is passed into law. Furthermore, eliminating the tax on dividends and capital gains would immediately add trillions of dollars in new wealth to the economy, benefiting all Americans. Perry clearly understands that revitalizing  the economy should start with a complete overhaul of a tax code that has nearly choked economic growth to death. Conservatives looking for a champion to carry the banner of a pro-growth tax reform will surely rally behind this bold proposal.”

“I continue to be disappointed that Governor Romney has yet to embrace a flat or fair tax,” added Club for Growth President Chris Chocola. “He would be wise to avoid using class warfare when comparing his current proposals to those of Governor Perry or Herman Cain. The Club for Growth is looking for bold leadership on tax reform from the Republican nominee – not demagoguery or platitudes.”

The question about conservatives rallying to the plan is secondary, at the moment, to whether they will rally to the man.

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Comment pages: 1 2

In the tank…as expected.

Chudi on October 25, 2011 at 12:15 PM

Racist lovers, ain’t they.

cozmo on October 25, 2011 at 12:17 PM

Listening at work to Rush defend Herman Cain. Love it.

Elisa on October 25, 2011 at 12:20 PM

BTW, notice Drudge is saying Europe’s economy is grimmer by the day…you know the failing economy that Mitt said was a “hypothetical” and was afraid to answer…well Mitt, you little prognosticator of all, looks like you aren’t such an economic genius after all.
Meanwhile, Perry is out creating a logical, bold, tax plan that is under 1,000 pages…

right2bright on October 25, 2011 at 12:21 PM

Perry needs to spend several hours a week in a mock debate. No matter how good his economic plan is, if he can’t beat Obama in a debate, I don’t want him to be the Republican nominee.

huckleberryfriend on October 25, 2011 at 12:28 PM

My head is spinning and I am getting a sick feeling over Perry’s plan.

Last night his WSJ article said the “Standard Deduction” would be raised to $12,500. That’s $900 more than the current 2011 Standard Deduction of $11,600, for people who do NOT itemize their deductions on a Sch A.

Today, as Ed mentions above, it seems he means raising the Personal Exemption each per taxpayer and spouse and each dependent. And still keep some of the deductions that would go into the Standard Deduction/Sch A, like mortg int and state and local taxes and contributions. (Cain only allows contributions.)

In 2011 the Personal Exemptions are $3,700 per person in the family. Currently, a family of 4 would have $14,800 exempted from income.

This would be raised to $50,000 plus some of the current deductions for a family of 4? So it could be $60,000 or more tax free?

What about people with 3 children? $62,500 – $72,500 or more tax free?

What about people with 4 children? $75,000 – $85,000 or more tax free?

This can’t be the case. This needs to be explained.

Otherwise, instead of reducing the number of Americans who pay ZERO taxes today, it would increase the number of Americans who pay ZERO tax.

Is there a link yet to the details of this plan?

Elisa on October 25, 2011 at 12:31 PM

“I, El Rushbo, think [Perry's plan] is great.”

fossten on October 25, 2011 at 12:35 PM

Otherwise, instead of reducing the number of Americans who pay ZERO taxes today, it would increase the number of Americans who pay ZERO tax.

Elisa

On the upper end too because of his 0% capital gains tax.

We might as well just cut to the chase and have ZERO TAXES FOR ALL! It’s like liberals and their MEDICARE FOR ALL! Consequences be damned!

haner on October 25, 2011 at 12:37 PM

Perry has been a governor for over 20 years. You seriously think he is afraid of the media? Then you are naive.

Decisions on whether or not to appear on media “shows” are made by campaign strategists after they do a cost-benefit analysis.

Let me give you a hint: What was the benefit of making Perry go on those shows when he hadn’t yet finalized the details of his economic/energy plan. You have to be armed with specifics. Cain’s bungled 9-9-9 plan should have taught you that much.

Maybe YOU should be armed with specifics. While Perry is the longest-serving Republican Governor, he has NOT been Governor for 20 years. He was promoted from Lt. Governor to Governor when George W. Bush resigned to become President in 2001, which was less than 11 years ago.

Whether Perry is “ready for prime time” is highly debatable. He was nearly tied with Romney when he entered the race, but was clearly unprepared for the debates–why didn’t he “arm himself with specifics” BEFORE getting into the Presidential race?

As for Perry’s plan, cutting the corporate tax rate to 20% (from 35%) will most definitely increase corporate after-tax profits, and fuel a major influx of money into the stock market. If America’s corporate tax rate is comparable to those of Europe, multi-national corporations will be less encouraged to move overseas, and more encouraged to relocate here.

As for Perry’s personal income tax plan, there will be winners and losers. Under the current system, the standard deduction is $11,400 plus $3,650 per dependent, whereas under Perry’s plan, the exemption is $12,500 per dependent, so that large families with relatively low incomes will pay less taxes under Perry’s plan, while people without dependent children (especially single people) will prefer the current system.

In 2010, the current tax rates (for married filing jointly) on income AFTER exemptions were:
10% up to $16,750
15% on the next $51,250
25% on the next $69,300
28% on the next $71,950
33% on the next $164,400
35% beyond $373,650 income.

A family of four making less than $50,000 would pay no taxes under Perry’s plan, but under the current plan they would have a “taxable” income of $24,000, with $1,675 tax on the first $16,750, and $1,238 tax on the last $8,250, for a total tax of $2,913, LESS $2,000 in child tax credits, for a tax of $913.

Beyond $50K, the family would pay 20% under Perry’s plan but only 15% under the current plan, or an additional 5% per dollar earned over $50,000. After $18,260 of additional income, or $68,260 of total income, the family’s tax would be equal under both plans.

Under the current tax plan, this family would reach the end of the 15% bracket after $26,000 (exemptions) + $68,000 (taxable income) = $94,000 total income. Under the current system, their income tax would be $9,363 (tax tables) – $2,000 (child tax credits) = $7,363. Under Perry’s plan, their tax would 0.20 * $44,000 = $8,800.

Beyond $94,000 income, the family would be in the 25% bracket under the current system, and would save a net 5% on marginal dollars under Perry’s plan. In order to save the $1,437 of additional taxes at $94,000, the family would have to earn an additional $1,437/0.05 = $28,750, reaching a break-even point at $94,000 + $28,750 = $122,750, beyond which Perry’s plan would lower their taxes.

To summarize, for a family of four with two dependent children:
Income < $68,260: Perry's plan lowers their taxes.
$68,260 < Income $122,750: Perry’s plan lowers their taxes.

Perry’s plan hurts upper-middle-class taxpayers and helps low- and high-income people, for a family of four. For smaller families (with fewer exemptions) the bracket that Perry’s plan would hurt would become wider, shifted toward lower incomes. For larger families, the bracket would become narrower, or perhaps disappear entirely with enough children.

From a political point of view, Perry’s plan has the advantage of not hurting, and potentially helping, low-income people, and there is no Federal sales tax that can be demagogued. However, it hurts upper-middle-class families, who are more likely to vote Republican, and really clobbers single people (who voted overwhelmingly for Obama last time). Will they be willing to pay higher taxes so that high-income “job creators” can hire them?

Steve Z on October 25, 2011 at 12:37 PM

We might as well just cut to the chase and have ZERO TAXES FOR ALL! It’s like liberals and their MEDICARE FOR ALL! Consequences be damned!

haner on October 25, 2011 at 12:37 PM

Sing it sister!

Bless your heart.

cozmo on October 25, 2011 at 12:37 PM

What about businesses who file Schedule K-1s that pass their income to the owners/shareholders to put on their personal income taxes?

That’s alot of people and businesses.

K-1s are already a pain in the neck. Now what? What if there are more than one owner? Most are.

Would the business have to file 2 different K-1s? One for people who want to file their taxes under the old option that has deductions from revenue and another for those who want to file under the new 20% flat tax with no deductions?

And how does that work out for the government? Some people paying tax on some of the revenue and others on another portion? What if it doesn’t add up to 100%?

That wouldn’t work. This will generate even more IRS compliance code rules for businesses to deal with.

Add to the code and make it more confusing? Something big must be missing from this option thing. It must still be scrapping the old current code entirely and simply have 2 sets of tax RATES.

Elisa on October 25, 2011 at 12:38 PM

Other than the option of keeping the current tax system, the rest of his plan is great. Reduce spending, reform Social Security,etc.

But Cain and Newt would be doing that same thing Only Perry, Cain and Newt would have the will and guts to do those things. Romney won’t. He will just nip at the edges.

Elisa on October 25, 2011 at 12:40 PM

Rush is praising Perry’s new plan now. He likes Cain and Newt plans too. Gets the conversation going. He’s a happy man.

kerrhome on October 25, 2011 at 12:45 PM

From a political point of view, Perry’s plan has the advantage of not hurting, and potentially helping, low-income people, and there is no Federal sales tax that can be demagogued. However, it hurts upper-middle-class families, who are more likely to vote Republican, and really clobbers single people (who voted overwhelmingly for Obama last time). Will they be willing to pay higher taxes so that high-income “job creators” can hire them?

Steve Z on October 25, 2011

I think your numerical analysis is sound but you’re leaving out a major plank of the plan…that is, how the income, capital gains and estate taxes are treated for businesses. Many, actually most, small businesses are owned and operated by the upper middle class that you mention as being hurt by the plan. With no capital gains taxes, no estate taxes and a flat rate of income tax, such businesses and the people who operate them will benefit immeasurably. Of course, that spurs massive economic growth.

JonPrichard on October 25, 2011 at 12:46 PM

I don’t like In State Perry, but I DO like the fact his plan would do away with baseline budgeting.

Darksean on October 25, 2011 at 12:49 PM

Rush is praising Perry’s new plan now. He likes Cain and Newt plans too. Gets the conversation going. He’s a happy man.

kerrhome on October 25, 2011 at 12:45 PM

None of that matters! Can’t you see from the yappin’ commenters that only Romney matters! Go ahead and assimilate already and all will be well.

Rush is so yesterday! Romney is today!

cozmo on October 25, 2011 at 12:49 PM

We might as well just cut to the chase and have ZERO TAXES FOR ALL! It’s like liberals and their MEDICARE FOR ALL! Consequences be damned!

haner on October 25, 2011 at 12:37 PM

I can’t see the liberal class warfare angle working for your candidate.

Vashta.Nerada on October 25, 2011 at 12:56 PM

I sure hope Perry can make an irrational and incoherent statement to explain it at the next debate!

lorien1973 on October 25, 2011 at 12:58 PM

We might as well just cut to the chase and have ZERO TAXES FOR ALL! It’s like liberals and their MEDICARE FOR ALL! Consequences be damned!

haner on October 25, 2011 at 12:37 PM

That strawman is very crudely built and looks like it’ll topple at any second.

Oh.

No one is suggesting 0 taxes for all. People are suggesting that everyone has skin in the game and government learns to live within its means, like everyone else.

Oh. The strawman, it fell over :(

lorien1973 on October 25, 2011 at 1:00 PM

So why not put in a sunset for the actual departments and agencies with the regulatory power?

The regulations are the end point of the problem, the start is the federal power to make them possible. End the source of the abuse and it goes away.

ajacksonian on October 25, 2011 at 1:00 PM

OT: msdnc…perry and the birther issue all day long

wow

cmsinaz on October 25, 2011 at 1:01 PM

But Cain and Newt would be doing that same thing Only Perry, Cain and Newt would have the will and guts to do those things. Romney won’t. He will just nip at the edges.

Elisa on October 25, 2011 at 12:40 PM

You SAID IT, sister. This is what bugs me about him the MOST.

fossten on October 25, 2011 at 1:07 PM

First -no tax credits beyond what you pay in -I would like to see all people pay with an incentive for those habitually on the dole to receive tax breaks that temporarily help them do that.

First -we need to put a fair share of their burden on them. How about tax breaks if your kids aren’t doing crime and working toward good grades and you name the father?

Don L on October 25, 2011 at 1:12 PM

First -we need to put a fair share of their burden on them. How about tax breaks if your kids aren’t doing crime and working toward good grades and you name the father?

Don L on October 25, 2011 at 1:12 PM

Why would they vote for that?

fossten on October 25, 2011 at 1:25 PM

Maybe YOU should be armed with specifics. While Perry is the longest-serving Republican Governor, he has NOT been Governor for 20 years. He was promoted from Lt. Governor to Governor when George W. Bush resigned to become President in 2001, which was less than 11 years ago.

Whether Perry is “ready for prime time” is highly debatable. He was nearly tied with Romney when he entered the race, but was clearly unprepared for the debates–why didn’t he “arm himself with specifics” BEFORE getting into the Presidential race?

Steve Z on October 25, 2011 at 12:37 PM

Geez! I corrected myself after notropis pointed it out @ 10:51am.

Talking of specifics, I will prefer someone (Perry) who takes his time to think out problems and their solutions than another who shoots from the hip ill-thought solutions (Cain) that only aggravate the problem.

TheRightMan on October 25, 2011 at 1:26 PM

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.

This will likely mean that US based multinationals will end up paying more taxes overseas. The are loads of mutual tax treaties with other nations which are predicated on excluding double taxation. If earnings are not taxed in the US… many will find that they are probably going to be subjected to a range of local taxes regimes.

This is not a serious plan. It resembles rushed thoughts on a napkin rather than a comprehensive multi-stage and multi-year reform plan. If your objection to Obamanomics is the deficit spending you are going to have a hard time pushing this without looking like a ridiculous hipocrite.

We desperately need tax code reform…. so individuals who have small businesses or are salaried with basic investments don’t need to hire a tax professional to acheive the same basic tax rates as tycoons. Start with that and a gradual reduction of corporate tax. Introduce consumption taxes with a plan for those to increase over time as the current system is phased out. Tax reform is going to be phenominally difficult politically because of the extremely powerful forces who milk the status quo (lawyers, accountants, corporations and other proffessional groups). This plan looks like an empty campaign promise whatever the Club for Growth says.

lexhamfox on October 25, 2011 at 1:29 PM

None of that matters! Can’t you see from the yappin’ commenters that only Romney matters! Go ahead and assimilate already and all will be well.

Rush is so yesterday! Romney is today!

cozmo on October 25, 2011 at 12:49 PM

:) We’re going to get through this. Romney is not going to be the nominee. We may not agree on who is best (actually, I don’t know your fav), but we know Romney is not the right guy.

kerrhome on October 25, 2011 at 1:29 PM

Why would they vote for that?

fossten on October 25, 2011 at 1:25 PM

They won’t. And there are almost enough of them to decide a national election on their own.

cozmo on October 25, 2011 at 1:30 PM

These are the kind of shenanigans that professional politicians come up with when they are so focused on winning the next office for their own ego that they ignore the fact that they aren’t qualified to hold that office.

csdeven on October 25, 2011 at 1:32 PM

:) We’re going to get through this. Romney is not going to be the nominee. We may not agree on who is best (actually, I don’t know your fav), but we know Romney is not the right guy.

kerrhome on October 25, 2011 at 1:29 PM

Not according to the Romney nutballs.

My personal scorecard goes Cain, Perry, Gingrich (the others don’t rate at this time). But Cain’s personal attacks on Perry tightened that score.

cozmo on October 25, 2011 at 1:33 PM

What are the qualities of a good tax system?

1) Reasonably level rates of income for the governing authority so they can plan expenses.
2) Does not distort the market.
3) Does not disincentivize productivity and the creation of wealth.
4) Does not incentivize sloth and laziness.
5) Places the citizens and businesses who give consent to the governing body higher consideration than for those outside.

What kind of tax system does this?

Income taxes on private citizens. This kind of tax system would have to be flat with at most an exemption set at exactly the poverty level of those within the governing bodies zone of control. While initially progressive at low income levels, after a certain point, it does not make any difference. For example, with the current system, I usually stop going into work for overtime after I have reached 63 hours, because after that my tax rate increases to the point that I am taking home too little money for the time invested to make it worth it. With a flat tax, this should become a non issue. The problem with income taxes is that it can miss an entire class of citizen, the independently wealthy who inherited their money and never have nor will work for their entire lives. Even with a flat tax, the wealthiest Americans usually have the most turbulent of incomes, making booms and busts to cause government incomes to be very rocky and hard to plan for.
1 is negative, 2 is positive, 3 is positive, 4 is positive, 5 is positive.

Income taxes on corporations. There is no good tax on corporations. The only people who pay these taxes are the customers. It is hidden from the general population and requires massive amounts of effort to calculate. It also places the business at a disadvantage against foreign competitors, harming those the government supposedly represent. 1 is negative, 2 is negative, 3 is negative with respect to the zone of the taxing authority, 4 is positive, 5 is negative.

Income taxes on investments. Well, any tax on investments will cut investments, and this reduces productivity and the creation of wealth. When money is used to make money, everyone wins, so why penalize this activity with a tax? 1 is negative, 2 is positive, 3 is negative, 4 is negative, 5 is negative.

Sales tax one end user new items and services. Once again, the tax would have to be flat, would have to include all new items and all services or it would be distortive of the market. This tax hits everyone equally, no one would get around it, everyone would be paying based on their benefit from the soceity. If you spending the money, you are benefiting from the product and service you receive. Foreign companies are taxed at the same rate as local. Independently wealthy (currently not taxed) taxed along with the hard working middle class. Each person determines in advance how much they want to be invested in the country by deciding how much to spend and what to spend it on. Spending is something that does not deviate tremendously even in recessions it is only by a few percentage points. 1 is positive, 2 is positive, 3 is positive, 4 is positive, 5 is positive.

I do not think the government should implement a sales tax outside of a constitutional amendment that bars them from imposing all other taxes. One stream, reliable, flat and fair, reasonably allows people to determine their exposure. Buy used items, do not spend at your income or beyond.

astonerii on October 25, 2011 at 2:09 PM

astonerii on October 25, 2011 at 2:09 PM

You left out the fact that corporate income taxes have huge compliance costs and involve corruption and cronyism in the doling out of deductions, exemptions, and credits.
Also, there needs to be some way of taxing income generated from capital gains, or there will be a class that derives their income entirely from it (Warren Bennett) that would pay no taxes at all. My preference would be to treat a person’s investments as a sort of business, allowing them to buy and sell stocks and bonds without taxation untill money is removed from those investments for private use.

Count to 10 on October 25, 2011 at 2:23 PM

Count to 10 on October 25, 2011 at 2:23 PM

Your right about the corporate, I should have had a 6) Does not cost much to comply with.

As for the capital gains, the reason I want to go with one and only one tax, a consumption tax is that if someone makes money with money, and uses that money to reinvest instead of spending the money, why take part of that money away from the task of creating more wealth. While warren buffet is making massive amounts of money, many other people are making money from his investments in the form of jobs, product creation to support his investments and so forth. For example, if he funds a bank a couple hundred million dollars, that bank builds a few new branches, hires hundreds of more employees, and Warren makes an extra 25 million dollars and wants to invest that money somewhere else, why stop him? It is when he spends that money that he gets caught up, just like everyone else. Buys a new house or has one built, chaching. Buys a corporate jet, chaching… When the bank is building a new building, chaching, hires lawyers, chaching, buys new ATMs, chaching.

astonerii on October 25, 2011 at 2:34 PM

I don’t know if it will turn his numbers around – but Perry has hit a grand slam here with this flat tax. Whoever becomes the nominee (if it’s not him) – needs to adopt this plan.

This is actually a “Marginal Flat Tax” since it preserves some exemptions. The great thing about it – is it will increase the tax base and put more people with skin into the game. Beauty of a flat tax – is it’s very hard to raise politically since doing so raises taxes on just about everyone. So Dims would no longer be able to play the game of raising taxes on the very rich as a means of pandering to their base – those days will be over.

Another beauty of the plan? You can still go out, and buy a $40,000 car for $40,000. Under Herman Cain’s plan – that same car will cost you $52,000 (30% “Fair Tax” – yee haa cowboy). Messing with consumption is NOT the answer.

I also heard that part of Perry’s plan was to spend no more than 18% of GDP – good plan there – and it breaks from the establishment RINO’s who want to make that about 20% plus.

Very good plan Governor Perry.

Of course – Chudi won’t like it – because it hurts Mittens. Mittens won’t come out with a specific plan on this because any such plan as this would be a death-nell for his plans to expand RomneyCare to all 50 states.

HondaV65 on October 25, 2011 at 2:39 PM

As for the capital gains, the reason I want to go with one and only one tax, a consumption tax is that if someone makes money with money, and uses that money to reinvest instead of spending the money, why take part of that money away from the task of creating more wealth. While warren buffet is making massive amounts of money, many other people are making money from his investments in the form of jobs, product creation to support his investments and so forth. For example, if he funds a bank a couple hundred million dollars, that bank builds a few new branches, hires hundreds of more employees, and Warren makes an extra 25 million dollars and wants to invest that money somewhere else, why stop him? It is when he spends that money that he gets caught up, just like everyone else. Buys a new house or has one built, chaching. Buys a corporate jet, chaching… When the bank is building a new building, chaching, hires lawyers, chaching, buys new ATMs, chaching.

astonerii on October 25, 2011 at 2:34 PM

So you’re good with having to spend an additional $12,000 to buy a $40,000 car?

You’ll pay $52,000 dollars for that car?

HondaV65 on October 25, 2011 at 2:40 PM

kerrhome on October 25, 2011 at 1:29 PM

I guess we’ll see.

nswider on October 25, 2011 at 2:55 PM

So you’re good with having to spend an additional $12,000 to buy a $40,000 car?

You’ll pay $52,000 dollars for that car?

HondaV65 on October 25, 2011 at 2:40 PM

No, I buy used cars. So, I would pay state tax, and no federal based on my plan. And as for the amount of the tax, that is dependent upon the people to determine how much government they want. They want low taxes, they probably should vote for politicians who will provide lower cost government.

What exactly does your tax rate come out to anyways? 30%? Pretty funny.

astonerii on October 25, 2011 at 2:56 PM

There are a lot of reflexively, negative people who comment here. If you really cared about changing things, you would investgate a bit more before you started your whining.

Vince on October 25, 2011 at 10:47 AM

+100

capitalist piglet on October 25, 2011 at 3:38 PM

HondaV65 on October 25, 2011 at 2:39 PM

Except it is optional, therefore the tax system is not flattened, it’s just branched. This will actually make it that much easier to pander with since you’ll have two separate tax rate structures to do it with.

CrankyTRex on October 25, 2011 at 3:57 PM

Perry has been a governor for over 20 years. You seriously think he is afraid of the media? Then you are naive.

Decisions on whether or not to appear on media “shows” are made by campaign strategists after they do a cost-benefit analysis.

Let me give you a hint: What was the benefit of making Perry go on those shows when he hadn’t yet finalized the details of his economic/energy plan. You have to be armed with specifics. Cain’s bungled 9-9-9 plan should have taught you that much.

Team Perry is following their own timetable and coming out with carefully thought-out proposals. You are welcome to debate those proposals but quit the “Perry is done” meme. Because he is just getting started.

TheRightMan on October 25, 2011 at 10:24 AM

I think you are right. And I think that after the 1st of the
year, Palin will be stumping for him; if he wins she will be
in charge of energy.

Amjean on October 25, 2011 at 3:58 PM

Seems like this is in response to Cain’s success and not something that will ever happen.

PattyJ on October 25, 2011 at 10:47 AM

I disagree. He has been working this plan for awhile with economists and financial people that know what they are doing. I think Cain is the one that has the plan that could never happen, Perry’s is much more realistic, and he has a record of making positive change actually happen.

Susanboo on October 25, 2011 at 4:05 PM

but Perry has hit a grand slam here with this flat tax.

HondaV65 on October 25, 2011 at 2:39 PM

We will wait and see, but from what has been reveal so far, having two tax structures is not simplifying the tax code. We will all need to figure our taxes under both rates to determine which is best for our situation.

I call Perry’s plan the “Monopoly Tax”. Every household in the country will be sitting around the table at tax time EVERY year figuring their taxes both ways just like a player who has landed on the income tax space on a monopoly board.

“Lets see, do I just pay the flat tax or do I add up my cash, property, house, and hotels?”

We have all seen it happen and as @nal as people are with a board game, they will get real @nal with real money.

No thanks Perry, taxes aren’t a game.

csdeven on October 25, 2011 at 4:26 PM

Sample tax return under Perry’s plan.

You’ve got to see this.

capitalist piglet on October 25, 2011 at 4:27 PM

Having the option to continue filing under the old code makes this plan much more likely to get through the process, I think. It also gives comfort to people who fear a flat tax would hurt them.

capitalist piglet on October 25, 2011 at 4:28 PM

I disagree. He has been working this plan for awhile with economists and financial people that know what they are doing. I think Cain is the one that has the plan that could never happen, Perry’s is much more realistic, and he has a record of making positive change actually happen.

Susanboo on October 25, 2011 at 4:05 PM

This.

capitalist piglet on October 25, 2011 at 4:28 PM

You’ve got to see this.

capitalist piglet on October 25, 2011 at 4:27 PM

Yeah, so what? Everyone is going to do their taxes the traditional way to make sure the 20% isn’t going to be more expensive.

This isn’t a Monopoly Board Perry.

csdeven on October 25, 2011 at 4:44 PM

All the complexity, All the backroom dealing for constituancy groups, all the graft, all the loopsholes, and an extra tax to calculate. What is not to love about this.

astonerii on October 25, 2011 at 4:55 PM

Let me get this straight.

Some here would prefer the 9-9-9 but sometimes 3-3-3 but sometimes 9-0-9 plan which doesn’t have or does have “Right of Return”, electrified but not electrified but electrified with fences guarding 1000 foot sheer cliffs and keeping irrigation from farmers and ranchers as well as their fields drained, in Ubeki-beki-beki-stan?

Instead of building manufacturing facilities and half a dozen line tax returns and getting rid of loopholes?

What planet do you people live on?

Kermit on October 25, 2011 at 5:32 PM

“One hell of a plan” – Mark Levin re Rick Perry’s proposal out today.

kerrhome on October 25, 2011 at 6:14 PM

Thanks for the good write-up, Ed.

I love this plan and it should definitely give him a “second look” among voters.

-Aslan’s Girl

Aslans Girl on October 25, 2011 at 9:16 PM

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