Perry's Tax Plan

Rumors are circulating that Rick Perry has distributed a preview of his tax plan. Apparently the tax plan would leave the option for taxpayers to either:

A) File under the current tax system or,
B) Opt for a 20% flat tax on their incomes.

My reading of this is that it would mean people would pay a MAX of 20% in taxes, but everything would remain the status quo for the lower end of the income spectrum that would normally pay less than 20% after all is said and done.

Things would stay the same for MOST people. But for the top earners, there would be a 10-16% decrease. According to the liberal arguments against 999, this would be even worse. And it would not create any additional income stream, so the revenue for the government would take a major hit. How would we ever pay off this debt?

If his plan resembles this rumor, he's in for it.

The spending is the problem, not the revenue.

The US spends twice what it takes in.

If the lower 48% still pays no Federal income taxes under this plan, then why should they give a damn if others get tax cuts?

The spending is the major issue for sure, but the fact is.... the debt is already there. It will take revenue to pay it off. And they shouldn't give a damn. It's none of their business. The fact remains, though, that cutting taxes would eventually lead to more business volume and thus more raw dollars, but to get it paid off faster... I'm not so sure we don't need to keep revenues at least at the current level for a while. I wish he hadn't done it, but he did. Now we have to pay it off.

Spending should be cut to 2006 levels.

Any agency killing an industry should be gone.

I like this plan.

But you have to leave room to not only balance the budget, but to include enough to make big payments against the outstanding debt. You haven't answered the question about what to do about the debt. And I agree about federal agencies and reducing regulation. But he is leaving this debt legacy and it will have to be dealt with. That's gonna take revenue.

It's Funny. Just hours go I made fun of 9/9/9 as a "Steve Forbes plan". Well guess what....
Perry going for it actually/literally.

Oct 19, 2011, 8:06 PM
Rick Perry’s Support for a Flat Tax Cheers Steve Forbes
by John D. McKinnon
Rick Perry’s Support for a Flat Tax Cheers Steve Forbes - Washington Wire - WSJ

Rick Perry’s embrace of a flat tax makes the tough-talking Texas governor the unlikely political heir to Steve Forbes, the nerdy publisher and erstwhile presidential candidate.
Mr. Forbes was characteristically exuberant on Wednesday. “I’m very, very excited by it,” Mr. Forbes said in a telephone interview. “What Perry is proposing is a radical simplification of the income tax code….It’s finally coming to pass.”

Mr. Perry officially announced his support for the flat tax in a speech on Wednesday. Mr. Forbes, who ran in 1996 and 2000 and now is advising the Perry camp, said that the “concept remains the same” as his own flat tax plan from the 1990s. That plan included a $36,000 exemption for a family of four and a 17% flat rate on income above that level. It also would have eliminated taxes on personal savings and capital gains in order to encourage investment.

In political terms, the Perry proposal appears to be a response to the popularity of candidate Herman Cain’s own radical “9-9-9” tax plan, which combines a flat tax on businesses and individuals with a national sales tax.
[......]

Click to expand...

With a 36k Exemption and No Cap Gains/Divs hard to see how "17%" adds up to Rev Neutral

The problem with all these Scams, is of course, "Simpler" means Flatter, means More Regressive.
There's just no way to get around the fact that either:
1. You tax the Low and Middle More and give a Big Cut to the rich
(in this case containing the Billionaire/Forbes' favorite, No Cap Gains/Divs as well as a lower overall rate)
2. You're using a phone low rate that looks acceptable to all.

Regressive is not bad, in my view. But I like Cain's plan better. If what I heard is true, Perry's plan wouldn't even come close to being revenue neutral.

Reg said:

The spending is the problem, not the revenue.

The US spends twice what it takes in.

If the lower 48% still pays no Federal income taxes under this plan, then why should they give a damn if others get tax cuts?

Click to expand...

Apparently you are unaware of how balance sheets work. It has two big things, income and outgo. Deficits are caused when outgo is bigger than income. To say one one is the cause is to not understand how it works. If you wanted to say that spending is higher than it should be, that is a legit point, but claiming that spending in isolation is the cause of deficits is false.

mbig said:

With a 36k Exemption and No Cap Gains/Divs hard to see how "17%" adds up to Rev Neutral

The problem with all these Scams, is of course, "Simpler" means Flatter, means More Regressive.
There's just no way to get around the fact that either:
1. You tax the Low and Middle More and give a Big Cut to the rich
(in this case containing the Billionaire/Forbes' favorite, No Cap Gains/Divs as well as a lower overall rate)
2. You're using a phone low rate that looks acceptable to all.

Click to expand...

He never said that is going to be his exact plan. Let's wait till he finally releases his plan.

I am 100% certain it will be revenue neutral. He may not be the best debater, but he and his team are not idiots.

Reg said:

Spending should be cut to 2006 levels.

Click to expand...

Nah. Let's try 1906 levels. THAT would be a start.

kamikaze483 said:

Rumors are circulating that Rick Perry has distributed a preview of his tax plan. Apparently the tax plan would leave the option for taxpayers to either:

A) File under the current tax system or,
B) Opt for a 20% flat tax on their incomes.

Click to expand...

I certainly hope not - if you pay less currently, you'll stay under the old system, if you'd pay more, you move to the flat tax, and since everyone will want to know which, we'll end up with all the exact same complexity and compliance costs that we have now.

this is a bare improvement over our current system.... but not much of one. I'd vote for it as an improvement, but i'd expect it to be a building block rather than a finished product.

At the bare minimum, this plan would require a balanced budget amendment in order to work at all. And the balanced budget amendment would have to pass first, before the implementation of the new flat tax.

And a properly written budget has to account for every dollar, and I don't see any candidate that is talking about spending cuts anywhere close to the levels needed in order to balance the budget for current spending AND include in that budget any substantial payments on the existing debt. This plan further reduces revenue, which means there will have to be further cuts in spending in order to get the budget to balance.

(I'm all for drastic, radical cuts in revenue and spending... matter of fact, I would eliminate everything other than national defense, critical infrastructure, and the basics costs of a skeleton crew to operate the critical components of the government. I would keep the country safe, but people would have to fend for themselves while we worked on paying off the country's debt. But cuts like that won't pass right now, and if we can't make those cuts, then we couldn't balance the budget with anything less than a tax plan that is revenue neutral.