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

Take seniors and the military out of budget battles, what does that mean, never include them in budget cutting or that they can’t be used as immediate hostages in a heated budget debates?

Bishop on October 25, 2011 at 10:09 AM

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 wouldn’t relegate this to the level of a “quibble.” Americans despise the complexity of a tax code that’s so onerous that you have to pay people every year to figure it out for you.

He’s proposing layering a separate tax scheme on top of, not in place of, the current code. And making the sale for that, in my opinion, is going to be several times harder than selling 999, and Rick Perry’s no Herman Cain when it comes to communication.

KingGold on October 25, 2011 at 10:09 AM

Looks promising, but he needs to be out there selling it. He’s appearing on O’Reilly tonight, so that’s a start. I just have a bad feeling that his debate performances coupled with his disappearing act the last couple months may have already doomed him.

Doughboy on October 25, 2011 at 10:11 AM

The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate.
Rick Perry

Sounds good up front, but it’s going to take some time to parse for any potential ‘devils’ in the details.

listens2glenn on October 25, 2011 at 10:12 AM

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.

I’m curious about their rationale here… given that it is an either or situation, it seems more reasonable that most taxpayers will calculate their flat tax at 20% and then work it up the current way to see under which tax method they pay less. Higher wage tax earners will shift to the flat tax, but low to mid income earners would realize a higher tax burden under Perry’s plan. Additionally, this does nothing but increase the filing burden on taxpayers as they now will have to figure up their taxes two ways.

gatorboy on October 25, 2011 at 10:14 AM

A Choice? Ridiculous. Taxes should be definite, mandatory and flat. Choices = complications.

andy85719 on October 25, 2011 at 10:14 AM

If Perry’s going to sell the plan he’s got to know the plan, and he’s got to be able to go on and do interviews where he defends the plan. He can’t throw the plan out there today and then tell everyone to go to his website or ring up Steve Forbes if they want to know the details on the flat tax proposal.

Assuming O’Reilly’s not going to softball him tonight, we’re going to get a pretty quick test on whether Rick Perry 2.0 is any different from the original, since there already are dozens of questions about the flat tax (let alone border/immigration issues) for O’Reilly to ask Perry tonight, where viewers will be waiting to see if he can actually answer the questions, or just spout tongue-tied talking points that would show while he’s claiming the 20 percent flat tax plan as his own, he really doesn’t know what’s in it.

jon1979 on October 25, 2011 at 10:16 AM

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.

I don’t think people will flock to the new system. The people that will move to it will be the people who can figure out it will be cheaper for them. The people who either can’t figure out which is best or will pay less under the current code will stay right where they are.

What we will have is a schism between the people who get a better deal under the old tax code and people who get a better deal under the new one. That fundamentally undermines the whole point of a Flat Tax.

CrankyTRex on October 25, 2011 at 10:18 AM

So once you choose what system you want to use are you locked in it? If not, how often can you change?

Mark1971 on October 25, 2011 at 10:19 AM

I’m not a fan of making the flat tax optional on the personal side

This is brilliant politically.

- Disarms Obama on Perry hurting the poor

- Uses the left’s HC public option Trojan horse tactic against them. Except this version will actually work. People will flock to this plan and will eventually lead to dismantling the tax code.

faraway on October 25, 2011 at 10:19 AM

Additionally, this does nothing but increase the filing burden on taxpayers as they now will have to figure up their taxes two ways.

gatorboy on October 25, 2011 at 10:14 AM

My thoughts exactly. I will have to pay my accountant more money to figure my tax liability both ways. No savings there.

txsurveyor on October 25, 2011 at 10:20 AM

The lsm would rather focus on his northern answers instead

It’s a shame

cmsinaz on October 25, 2011 at 10:23 AM

I just have a bad feeling that his debate performances coupled with his disappearing act the last couple months may have already doomed him.

Doughboy on October 25, 2011 at 10:11 AM

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

This is not a flat tax, it’s just a cap of 20% on maximum marginal rates. The bottom 47% who pay nothing will still pay nothing since they can opt out.

haner on October 25, 2011 at 10:25 AM

At LEAST it’s finally (my father talked about this in 1973) being listened to in a realistic, DOABLE, frame of mind.

I think 10% is plenty, though at 20% to avoid the sales tax (even tough I like the idea of illegals finally paying something) might make better sense.

BUT…

without scrapping the current tax code(s) to the ash heap of history, it’s still a mess.

golfmann on October 25, 2011 at 10:25 AM

This doesn’t get rid of any of the concerns I had last night. I am getting a bad feeling.

I am going to wait and hear the details. This can’t be what I think it is. I will remain hopeful.

But this adds another question and can’t be the case:

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.”

It can’t be ALL other deductions eliminated. What about Costs of Goods Sold? That must be deducted from Revenue, as it under Cain’s transitional 999 plan.

Otherwise Businesses would be paying so much more under Perry’s plan than under Cain’s plan.

20% on a bigger income number if Costs of Goods Sold can’t be deducted.

VS

9% on a lower income figure after Costs of Goods Sold are deducted.

This can’t be the case. Otherwise, how would Perry’s plan be helping business? Including Sub S K-1 companies and Sch C business filers?

Need to wait for details and hope.

Elisa on October 25, 2011 at 10:26 AM

So the 47% who pay nothing now will stay where they are and still pay nothing. How is this better? Meanwhile, I get to do twice the work figuring out which way I pay less.

Beaglemom on October 25, 2011 at 10:26 AM

Birther issue

Dang Android……

cmsinaz on October 25, 2011 at 10:26 AM

I’m happy with anything that gets Perry back into the conversation.

Cindy Munford on October 25, 2011 at 10:29 AM

What we will have is a schism between the people who get a better deal under the old tax code and people who get a better deal under the new one. That fundamentally undermines the whole point of a Flat Tax.

CrankyTRex on October 25, 2011 at 10:18 AM

Exactly. It’s not a flat tax. It’s just an extra deduction for those making over six figures who are paying more than 20% right now. I don’t mind the tax cut, but Perry should call a spade a spade, don’t pretend it’s a flat tax.

This is a tax cut for the upper and upper middle class. The middle class gets nothing and an even larger share of the tax burden. The poor still pay nothing.

haner on October 25, 2011 at 10:29 AM

Drop the rate a little bit, and make it the only choice.

Ward Cleaver on October 25, 2011 at 10:30 AM

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.

I emailed him and asked him to make a promise to me about not using my family as a pawn in this sick political game. I got my promise.

milwife88 on October 25, 2011 at 10:30 AM

This is a tax cut for the upper and upper middle class. The middle class gets nothing and an even larger share of the tax burden. The poor still pay nothing.

haner on October 25, 2011 at 10:29 AM

FTW

gatorboy on October 25, 2011 at 10:31 AM

I can quibble, but overall, this is a pretty solid plan.

That said, Perry needs to be able to sell it now.

neoavatara on October 25, 2011 at 10:32 AM

I’m happy with anything that gets Perry back into the conversation.

Cindy Munford on October 25, 2011 at 10:29 AM

Me too :)

No plan is perfect but this is a pretty darn good one. Coupled with his energy plan and he’s got a very solid platform IMO.

Anxious to see him on the Factor tonight.

gophergirl on October 25, 2011 at 10:35 AM

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

TheRightMan on October 25, 2011 at 10:24 AM

Perry has been governor not quite 12 years. Before that he was lt. gov., Ag commissioner and state rep. I have been aware of him since his first run as Ag com. He doesn’t fear the media, he does despise them though.

cozmo on October 25, 2011 at 10:36 AM

That said, Perry needs to be able to sell it now.

neoavatara on October 25, 2011 at 10:32 AM

Yes he does – and do it well.

gophergirl on October 25, 2011 at 10:36 AM

I am cautiously optimistic. This plan should earn Perry a second look from primary voters. But now Perry needs to sell it. He was dogged, and rightfully so, for his debate performances. Now that he has a plan to fight FOR, I hope he will do better. The interview with O’Reilly will be interesting, and THAT could be a real game changer. O’Reilly has a very large audience. For many people, this will be the first time they hear Perry speak in person. I think he can leave a good impression in this format. The Perry I am familiar with is excellent in interviews, and in speeches. The challenge for Perry will be to simultaneously explain his tax overhaul and wrangle Bill O’Reilly’s super inflated ego.

bitsy on October 25, 2011 at 10:37 AM

This is a tax cut for the upper and upper middle class. The middle class gets nothing and an even larger share of the tax burden. The poor still pay nothing.

haner on October 25, 2011 at 10:29 AM

And it encourages more cronyism. The people who have the money to hire accountants and tax lawyers to do the math for them and figure out how to get the best rate will get it. The majority of the rest won’t really know. And for all those people who like to bring up how Congress will turn 999 into 10 10 10 or whatever, Perry’s plan gives them complete cover to continue making loopholes and exemptions for whomever is politically connected since it will happen in the old plan that “nobody pays” while everyone else is in the “Flat Tax.”

CrankyTRex on October 25, 2011 at 10:37 AM

I’m most excited about flattening the corporate tax rate, where Congress creates the most mischief.

Like.

simple 20% flat tax

Plus mortgage deductions etc… double like.

But now what I have to ask is, let’s say he was elected. What are the odds that this would actually happen?

Dash on October 25, 2011 at 10:38 AM

This is not a flat tax, it’s just a cap of 20% on maximum marginal rates. The bottom 47% who pay nothing will still pay nothing since they can opt out.

haner on October 25, 2011 at 10:25 AM

How do you know this? Have you read the plan? All that we have are pieces up to now.

cartooner on October 25, 2011 at 10:38 AM

I ran the numbers, and it looks like the average middle class taxpayer would pay a slightly lower tax under this plan. So far, so good.

Vashta.Nerada on October 25, 2011 at 10:38 AM

How do you know this? Have you read the plan? All that we have are pieces up to now.

cartooner on October 25, 2011 at 10:38 AM

The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate

If my current income tax rate is 0% and I have the option, why am I going to start paying 20%?

CrankyTRex on October 25, 2011 at 10:41 AM

Great plan. I’m seeing it is being well received. Club for Growth giving it a thumbs up is good news for team Perry. There is so much that is great in this plan.

Club for Growth prez Chris Chocola: “Rick Perry’s plan for tax reform would be massively pro-growth.”

Balanced Budget Amendment is great news. The fact that he’s going to barn storm the U.S. to get it done is even better. They have the amendment in TX and it works. Doing the same for the country makes a lot of sense.

kerrhome on October 25, 2011 at 10:42 AM

He’s proposing layering a separate tax scheme on top of, not in place of, the current code. And making the sale for that, in my opinion, is going to be several times harder than selling 999

KingGold on October 25, 2011 at 10:09 AM

How on earth would that make it a harder sell? This literally allows “if you like your plan, you can keep your plan”.

I do agree, however, that there should be some limitations on the two plans. For example, once you go to the flat rate, you can’t go back; and if you are a new filer, you can’t go to the old code; and maybe have a sunset provision when the old code goes away altogether.

besser tot als rot on October 25, 2011 at 10:42 AM

But now what I have to ask is, let’s say he was elected. What are the odds that this would actually happen?

Dash on October 25, 2011 at 10:38 AM

The odds are a lot better on Perry’s plan because he is realistic and has factored in a careful phase out of the current system. Unlike Mr. Cain’s 9-9-9 pie-in-the-sky approach that is still evolving and going through several permutations: 9-0-9, 9-0-0, 0-09, etc…

TheRightMan on October 25, 2011 at 10:43 AM

This is brilliant politically.

- Disarms Obama on Perry hurting the poor

- Uses the left’s HC public option Trojan horse tactic against them. Except this version will actually work. People will flock to this plan and will eventually lead to dismantling the tax code.

faraway on October 25, 2011 at 10:19 AM


Exactly.

bitsy on October 25, 2011 at 10:44 AM

If my current income tax rate is 0% and I have the option, why am I going to start paying 20%?

CrankyTRex on October 25, 2011 at 10:41 AM

That’s my point. You and haner are ASSUMING you will still have a 0% rate.

cartooner on October 25, 2011 at 10:46 AM

and it increases the standard deduction to $12,500 for individuals and dependents

Should NOT have used “standard deduction” in this sentence, and the WSJ editors should have caught it. From his response in the Q&A, it sounds like what he is really doing is combining standard deduction and the personal exemption into one “$12,500 per person/dependent” tax-free income allowance. No standard deduction or itemization of deductions, except for charities and mortgage interest. Either this should have been made clearer in the WSJ article, or I am misunderstanding his intent altogether.

If I do understand it his intent then: As for me and my house, I will (tentatively) praise the plan.

DrStock on October 25, 2011 at 10:46 AM

We should push for a flat tax rate in 2013 and say things like it has to be more simple. Even Charlie Rangle, Tom Daschle, and Tim Geithner couldn’t figure it out. I’m sure they would agree that a flat tax rate is the way to go. LOL

We should paint them in a corner of having 2 choices: A) Admit they are crooks or B) Get behind a flat tax.

We need to find a way to force that choice. The way I worded it, they will say, we need to simplify the code but the rich need to pay more…blah blah blah.

jeffn21 on October 25, 2011 at 10:46 AM

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

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

What about the earned income tax credit? Does Perry flat tax eliminate it?

Mark1971 on October 25, 2011 at 10:47 AM

Seniors and vets should pay zero taxes. Let that 49% that pay nothing start taking some responsibility. Get after the corporations that pay no taxes since they contribute to the Dems. This is not rocket science.

Hening on October 25, 2011 at 10:48 AM

If my current income tax rate is 0% and I have the option, why am I going to start paying 20%?

CrankyTRex on October 25, 2011 at 10:41 AM

If your rate is 0% under the current code, it is likely that it will be 0% under Perry’s plan since most of these people do not itemize. Under Perry’s plan, the standard deductions are higher, so your marginal rate will be 0% to a higher level. Then once you hit 20%, it will be awhile before your overall rate passes what it would be under the current code. The marginal rate may be higher at some of the lower levels (even if the overall rate is lower), but there would be incentive to make as much money as possible because the marginal rate doesn’t change as you move up the income ladder. Thus, one component of the pro-growth aspect.

besser tot als rot on October 25, 2011 at 10:48 AM

What about the earned income tax credit? Does Perry flat tax eliminate it?

Mark1971 on October 25, 2011 at 10:47 AM

Probably not, but it should.

besser tot als rot on October 25, 2011 at 10:49 AM

Go Perry Go!

Texican Ben on October 25, 2011 at 10:49 AM

it sounds like what he is really doing is combining standard deduction and the personal exemption into one “$12,500 per person/dependent” tax-free income allowance. No standard deduction or itemization of deductions, except for charities and mortgage interest. Either this should have been made clearer in the WSJ article, or I am misunderstanding his intent altogether.

If I do understand it his intent then: As for me and my house, I will (tentatively) praise the plan.

DrStock on October 25, 2011 at 10:46 AM

That is the way I read it as well, except it looks like state/local/personal property taxes are also excluded from income.

Vashta.Nerada on October 25, 2011 at 10:49 AM

I ran the numbers, and it looks like the average middle class taxpayer would pay a slightly lower tax under this plan. So far, so good.

Vashta.Nerada on October 25, 2011 at 10:38 AM

I would pay lower.

gophergirl on October 25, 2011 at 10:49 AM

Perry has been a governor for over 20 years.

TheRightMan on October 25, 2011 at 10:24 AM

Of what? Seems to me that 20 years ago, Ann Richards was governor of Texas. And after her, and before Perry, there was some other guy that got elected governor a couple of times….

notropis on October 25, 2011 at 10:51 AM

There are a lot of reflexively, negative people Romney staffers 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

FIFY

Also, to the Romney staffers: Romney should come up with his own plan for reforming entitlement and the tax code rather than a 59 point of tinkering at the edges plan. He may gain some actual credibility. Too much to ask, I know.

besser tot als rot on October 25, 2011 at 10:51 AM

That’s true. When people finally delved into Cain’s plan, all of the holes and potential disaster became very apparent.

Voter from WA State on October 25, 2011 at 10:44 AM

And that will be the key difference between Perry’s approach and Cain’s approach.

One (Cain) rushes out an ill-thought tax reform plan couched in a slogan to sell his campaign. The other (Perry) takes his time to come out with a well-reasoned plan that is realistic and will actually work.

TheRightMan on October 25, 2011 at 10:51 AM

A real flat tax would be something like a 15% flat rate on ALL income, this includes capital gains, interest and dividends. Everyone would have the same skin in the game. The rich can’t hide their income in stock options and trust funds either. Perry’s “flat” tax plan instead will remove all capital gains and estate taxes. It doesn’t take a genius to figure out that the rich would use the 0% capital gains and trust funds to get themselves out of paying the 20% “flat” tax. Meanwhile Perry allows the poor to opt out of his “flat” tax plan.

I’m not ready for this country to turn into a Latin American banana republic just yet.

haner on October 25, 2011 at 10:52 AM

If your rate is 0% under the current code, it is likely that it will be 0% under Perry’s plan since most of these people do not itemize. Under Perry’s plan, the standard deductions are higher, so your marginal rate will be 0% to a higher level. Then once you hit 20%, it will be awhile before your overall rate passes what it would be under the current code. The marginal rate may be higher at some of the lower levels (even if the overall rate is lower), but there would be incentive to make as much money as possible because the marginal rate doesn’t change as you move up the income ladder. Thus, one component of the pro-growth aspect.

besser tot als rot on October 25, 2011 at 10:48 AM

So what you’re saying is, it will be incredibly complicated and not everyone will be paying the same rate. That is the exact opposite of what a Flat Tax is.

CrankyTRex on October 25, 2011 at 10:52 AM

The naysayers here are assuming a lot of things they don’t know are factual. If Forbes, Club for Growth and other well known low-tax advocates like it, I’d say study it before trashing it……unless you’re an OWS participant.

Also, if it’s half the job/growth creator some claim, you have to dynamically, not statically, consider how it would work.

cartooner on October 25, 2011 at 10:53 AM

So what you’re saying is, it will be incredibly complicated and not everyone will be paying the same rate. That is the exact opposite of what a Flat Tax is.

CrankyTRex on October 25, 2011 at 10:52 AM

No. That is not what I’m saying. I’m explaining a flat tax to you, since you clearly have no idea.

besser tot als rot on October 25, 2011 at 10:54 AM

Perry supporters – they are livestreaming his speech on his website if you are interested.

gophergirl on October 25, 2011 at 10:54 AM

He’s proposing layering a separate tax scheme on top of, not in place of, the current code. And making the sale for that, in my opinion, is going to be several times harder than selling 999, and Rick Perry’s no Herman Cain when it comes to communication.

KingGold on October 25, 2011 at 10:09 AM

Perry’s actually a fantastic speaker on the stump. His debate performances have been lackluster, certainly, but don’t discount his communication skills entirely. He can sell this plan on the stump if he has to. Defending it in a debate will be the tough part.

This plan is way better than 9-9-9, in my opinion, because it doesn’t open the door for a new revenue stream — national sales tax — in tandem with the federal income tax, the way Cain’s plan does. I appreciate Cain’s boldness but I’m not a big fan of his plan now that some of the details are coming out.

Caiwyn on October 25, 2011 at 10:54 AM

Perry has been a governor for over 20 10 years.

TheRightMan on October 25, 2011 at 10:24 AM

Of what? Seems to me that 20 years ago, Ann Richards was governor of Texas. And after her, and before Perry, there was some other guy that got elected governor a couple of times….

notropis on October 25, 2011 at 10:51 AM

FIFM – Mea culpa. This is what happens when I decide to go without coffee. Now excuse me while I go to gorge myself.

:)

TheRightMan on October 25, 2011 at 10:55 AM

Perry supporters – they are livestreaming his speech on his website if you are interested.

gophergirl on October 25, 2011 at 10:54 AM

Thanks for the heads up.

Caiwyn on October 25, 2011 at 10:55 AM

there’s an old adage i like, “how do you eat an elephant” the answer “one bite at a time”. to think that you can just completely scrap the current system of taxation is way too idealistic and pie in the sky. start out slowly, let people see that the new way isnt bad or evil, offer them the option of using the old one if they just cant handle that much change that quickly. regardless of how bad and awful the current system is, its still the way most people have been doing taxes and people resist change, especially radical change. it would be nice if we could make vast sweeping changes that we see as necessary but the reality is that things need to be moved along at a pace the people are comfortable with.

chasdal on October 25, 2011 at 10:55 AM

A real flat tax would be something like a 15% flat rate on ALL income, this includes capital gains, interest and dividends. Everyone would have the same skin in the game. The rich can’t hide their income in stock options and trust funds either.
haner on October 25, 2011 at 10:52 AM

It isn’t the rich that will cheer the plan – it is retirees, who have a doubtful income stream from the bankrupt social security system.

Vashta.Nerada on October 25, 2011 at 10:55 AM

And thanks, notropis, for pointing that out.

TheRightMan on October 25, 2011 at 10:55 AM

I ran the numbers, and it looks like the average middle class taxpayer would pay a slightly lower tax under this plan. So far, so good.

Vashta.Nerada on October 25, 2011 at 10:38 AM

Would you care to show your work with the class? Other students are finding quite the opposite.

gatorboy on October 25, 2011 at 10:57 AM

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.

Oh, for crying out loud, just scrap the whole corporate tax and just tax dividends as personal income.

Count to 10 on October 25, 2011 at 10:57 AM

No. That is not what I’m saying. I’m explaining a flat tax to you, since you clearly have no idea.

besser tot als rot on October 25, 2011 at 10:54 AM

You just said that not only do I have two choices as to what rate I will pay, I actually have two sets of rates of deductions based on which plan I choose. How is that a Flat anything?

CrankyTRex on October 25, 2011 at 10:57 AM

A real flat tax would be something like a 15% flat rate on ALL income, this includes capital gains, interest and dividends. Everyone would have the same skin in the game.

haner on October 25, 2011 at 10:52 AM

Under normal circumstances, I’d agree with you. But under the current circumstances, housing prices are inflated to a non-market sustainable level due do the value priced in by the mortgage interest deduction. And they are still underwater. Getting rid of the mortgage interest deduction would further devastate the housing market, which would severely damage the economy (as we saw with the last housing crash).

As far as the charity deduction goes – I’d rather money be going to charities than the government. And this is always the rejoinder question to a flat tax plan – what about charities. Just get rid of that question. It is similar to the current retiree question under any proposed SS reform plan.

besser tot als rot on October 25, 2011 at 11:00 AM

Perry’s “flat” tax plan calls for a 0% capital gains tax for all income levels.

It would be the fiduciary duty of every money manager to ensure that their rich clients’ gross incomes are reported as capital gains (via stock options in lieu of salary income). So the rich who have the means of receiving their incomes as investment income pay an effective 0% income tax.

Who gets the shaft? The middle class. The Forbes types, the poor and the illegals make out like bandits. Banana republic here we come! Brazil style!

haner on October 25, 2011 at 11:00 AM

The final question is the key and answer is NO; this won’t bring people to the man himself.

michaelo on October 25, 2011 at 11:02 AM

A President has the “power” to suggest tax plans to Congress. So does every other man woman and child in the world.

According to the Constitution, a President’s main role is to CUT spending and programs. Here’s an idea: Tell me what kind of bills you will veto, what kind of bills you will sign, and what you will do or not do with your executive powers – if you can be bothered to get around to it, that is.

I sure as heck can’t my own time to compete in this Fantasy Tax Plan League. But somehow every GOP candidate suddenly decided that it would be a great idea to clear his schedule and take part in this bizarre farce? This is not a good sign.

logis on October 25, 2011 at 11:03 AM

The plan must look better that I thought at first glance. The Perry haters are running around in circles yapping about how awful it is while the details aren’t yet released.

cozmo on October 25, 2011 at 11:04 AM

I don’t like Perry and I make no secret of that. That said, from a purely political standpoint (nothing to do with the merits of the plan) I think it is a stretch to call a fiscal plan a political “game-changer”. The average voter can barely understand 9-9-9. Specifics of fiscal policy and numbers just tend to go over people’s heads. The praise by The Club for Growth will help a bit, but I think that Hot Air posters (people who regularly read about and comment on policy) are going to pay a bit more attention to (and be a bit more knowledgeable of) the details than the average voter.

athenanyc on October 25, 2011 at 11:05 AM

I prefer a 0-0-0 tax plan.

This way, nobody pays taxes of any sort, and everything is free!

Free college = no college loan = no taxes needed for school lending programs = FREE!

BobMbx on October 25, 2011 at 11:05 AM

gatorboy on October 25, 2011 at 10:57 AM

Based on 2010 tax rates, a family of four with $100K in AGI with a mortgage, charitable donations, and state/local taxes would pay around $6500-$7000 in taxes, even with the $1000 per child tax credit applied. That same family in 2012-3 time frame would deduct from the $100K income: $5k in interest, $5k in charitable contributions, $11k in state and local taxes, and $50k in personal deductions. The net $30K taxed at 20% is $6k.

Vashta.Nerada on October 25, 2011 at 11:06 AM

The plan must look better that I thought at first glance. The Perry haters are running around in circles yapping about how awful it is while the details aren’t yet released.

cozmo on October 25, 2011 at 11:04 AM

That is some logic. Just be careful of that cliff you’re backing dangerously toward.

Look I’m all for a flat tax. But this ain’t a flat tax. It’s a tax cut to the upper classes (0% capital gains, 20% maximum marginal rate). There’s nothing flat about it. The hump is the middle class tax burden.

haner on October 25, 2011 at 11:10 AM

Perry’s “flat” tax plan calls for a 0% capital gains tax for all income levels.
It would be the fiduciary duty of every money manager to ensure that their rich clients’ gross incomes are reported as capital gains (via stock options in lieu of salary income). So the rich who have the means of receiving their incomes as investment income pay an effective 0% income tax.
Who gets the shaft? The middle class. The Forbes types, the poor and the illegals make out like bandits. Banana republic here we come! Brazil style!
haner on October 25, 2011 at 11:00 AM

Oh, joy.
I’d prefer a tax system that only taxed capital gains when they were removed from investment accounts for personal use to the system we currently have, but you are absolutely right about the “unintended consequences” of zeroing out the capital gains tax.

Count to 10 on October 25, 2011 at 11:10 AM

Anxious to see him on the Factor tonight.

gophergirl on October 25, 2011 at 10:35 AM

yes

Yes he does – and do it well.

gophergirl on October 25, 2011 at 10:36 AM

and yes

cmsinaz on October 25, 2011 at 11:11 AM

Now…

If he could just string a couple sentences together without having a series of mini-strokes….

IronDioPriest on October 25, 2011 at 11:15 AM

haner on October 25, 2011 at 11:10 AM

You are one of the one’s yapping the loudest without even knowing the plan. I am one of those in the middle with a few investments and a wife with a 401k plan. We ain’t rich, but we do know about the capital gains tax. The one that is “0″ under Perry, one of Cain’s “9″‘s and around 15% now. Romney’s plan, while simpler than current tax code is not easily explained. I’m leaning towards Cain but can see the simplicity of Perry’s plan. All you have done is bash Perry…all the time.

cozmo on October 25, 2011 at 11:16 AM

Really excited about this plan. Twitter is abuzz too. Let’s see him get out there and make the case for it. I hope Sarah will come out again and give her approval.

kerrhome on October 25, 2011 at 11:21 AM

Really excited about this plan. Twitter is abuzz too. Let’s see him get out there and make the case for it. I hope Sarah will come out again and give her approval.

kerrhome on October 25, 2011 at 11:21 AM

Are you listening to the speech?

gophergirl on October 25, 2011 at 11:22 AM

The plan must look better that I thought at first glance. The Perry haters are running around in circles yapping about how awful it is while the details aren’t yet released.

cozmo on October 25, 2011 at 11:04 AM

If it gets their panties wadded up this bad, it must be pretty awsome!

cartooner on October 25, 2011 at 11:23 AM

You are one of the one’s yapping the loudest without even knowing the plan. I am one of those in the middle with a few investments and a wife with a 401k plan. We ain’t rich, but we do know about the capital gains tax. The one that is “0″ under Perry, one of Cain’s “9″‘s and around 15% now. Romney’s plan, while simpler than current tax code is not easily explained. I’m leaning towards Cain but can see the simplicity of Perry’s plan. All you have done is bash Perry…all the time.

cozmo on October 25, 2011 at 11:16 AM

Why don’t you just ask for 0% taxes for everything and be done with it? How are you any different from the liberals who want everything for free, consequences be damned?

Everything I have said about Perry’s plan has already been made public by Perry’s own campaign. I’ve given no false information. A 0% capital gains tax will be a huge incentive for every executive to make a $1 salary and receive the rest of their compensation in stocks, dividends and stock options. I don’t blame the rich for that, they are just doing what is in their rational best interest. But anyone with two brain cells can understand there is nothing “flat” about a 0% capital gains tax on all income levels.

haner on October 25, 2011 at 11:26 AM

If it gets their panties wadded up this bad, it must be pretty awsome!

cartooner on October 25, 2011 at 11:23 AM

Like polling at 5% awesome….

haner on October 25, 2011 at 11:27 AM

haner on October 25, 2011 at 11:26 AM

haner on October 25, 2011 at 11:27 AM

Yip, yip, yip. Give it a rest and go back to fluffin’ Romney.

As for you ranting, I’ll prefer to listen to my accountant.

cozmo on October 25, 2011 at 11:30 AM

A Choice? Ridiculous. Taxes should be definite, mandatory and flat. Choices = complications.

andy85719 on October 25, 2011 at 10:14 AM

I tend to agree. The “choice” aspect suggests lack of resolve, a person unwilling to commit and defend the commitment.

rrpjr on October 25, 2011 at 11:30 AM

A 0% capital gains tax will be a huge incentive for every executive to make a $1 salary and receive the rest of their compensation in stocks, dividends and stock options. I don’t blame the rich for that, they are just doing what is in their rational best interest. But anyone with two brain cells can understand there is nothing “flat” about a 0% capital gains tax on all income levels.

haner on October 25, 2011 at 11:26 AM

Yes, we need to punish those evil executives for creating jobs. I can smell the irony in your post from here.

Hiya Ciska on October 25, 2011 at 11:31 AM

LOL “I know this idea is going to get attacked”

This speech is very good so far.

gophergirl on October 25, 2011 at 11:31 AM

I am bored with all the tax plans-next already. They need to move on to national defense, and foreign policy.

Dr Evil on October 25, 2011 at 11:33 AM

LOL “I know this idea is going to get attacked”

This speech is very good so far.

gophergirl on October 25, 2011 at 11:31 AM

Is he talking about Donald Trump and the birth certificate again?

Knucklehead on October 25, 2011 at 11:35 AM

Is he talking about Donald Trump and the birth certificate again?

Knucklehead on October 25, 2011 at 11:35 AM

It’s a very good plan and a very good speech.

gophergirl on October 25, 2011 at 11:39 AM

Yes, we need to punish those evil executives for creating jobs. I can smell the irony in your post from here.

Hiya Ciska on October 25, 2011 at 11:31 AM

Who said anything about punishing the executives for creating jobs? The point is it’s not a flat tax if you cut capital gains to 0% when executives can get their compensations entirely in stock options and other investment incomes while the middle class receive the bulk of their income in the form of salaries. A real flat tax is where everyone pays the same effective rate on ALL THEIR INCOMES, not some arbitrary distinction only on earned incomes.

Perry’s plan puts the tax burden entirely on the middle class. There’s nothing flat about it.

If executives can only create jobs with 0% taxes on their own incomes, then this country is in a heck lot of trouble.

haner on October 25, 2011 at 11:41 AM

It’s a very good plan and a very good speech.

gophergirl on October 25, 2011 at 11:39 AM

I don’t know about the speech, but I don’t see how further complicating the tax code is a good plan. I may not be a Rick Perry fan, but the last thing I expected was that his plan was going to be some kind of opt-in secondary rate since he was talking about a Flat Tax. If we’re going to keep the old code, then I’d rather go with a Romney or a Newt like plan where we just adjust the rates rather than making a bigger mess of it.

CrankyTRex on October 25, 2011 at 11:43 AM

I am bored with all the tax plans-next already. They need to move on to national defense, and foreign policy.

Dr Evil on October 25, 2011 at 11:33 AM

Those are easier to work out. Tax policy is what will affect most Americans. There needs to be a plan that will nationalize all races next year. Cain does not have the moxie (at this time) to get representatives and senators to want to get on board. Romney’s plan isn’t simple enough to explain on the campaign trial. Jury is still out on Perry’s plan (not enough is known). If a new tax system gets the attention that the “Contract With America” got, there could be a mandate to actually get it done. Without that mandate, all these tax plans are just campaign rhetoric. We are at the tipping point with almost half of Americans not paying federal income tax, and some of them making money from the government in the form of “earned income tax credits”. If we go over that tipping point we will be in trouble for a long time.

cozmo on October 25, 2011 at 11:46 AM

I think it is a good start. Now I want to hear about a clause sunsetting the tax system we use today. I especially like the “automatic government shutdown insurance”. Folks taking fire in Afghanistan and elsewhere shouldn’t have to worry about whether their families will eat next week or not.

Now if he would only hire Newt (or someone like him) as a debate coach…

Dawnsblood on October 25, 2011 at 11:50 AM

If executives can only create jobs with 0% taxes on their own incomes, then this country is in a heck lot of trouble.

haner on October 25, 2011 at 11:41 AM

Ya’ know, it is starting to look like they are going to clear out the OWS sites. You may want to keep your head down.

cozmo on October 25, 2011 at 12:06 PM

Breaking:

Limbaugh: “I like Rick Perry’s plan.”

fossten on October 25, 2011 at 12:12 PM

In the tank…as expected.

Chudi on October 25, 2011 at 12:15 PM

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