Posted on 10/25/2011 12:11:36 PM PDT by SeekAndFind
With all of the attention falling on Rick Perry and the rollout of his economic plan based on flat-tax reforms, many may have missed Newt Gingrich’s column in the Quad City Times that covers his own plan. Gingrich has discussed his plan on a number of occasions, including the debates, and it does sound … oddly familiar. In fact, it goes further than Perry’s plan does in reducing tax rates:
The key to a robust recovery in job creation is to simplify the tax code and maximize capital investment, which begins with eliminating the capital gains tax and the death tax, reducing the corporate tax to 12.5 percent, and 100 percent expensing of all new capital equipment purchases.
These tax changes will liberate private capital to move quickly to the most productive investments, thereby accelerating economic growth. This is the opposite of the failed model practiced by the Obama administration, which is bureaucracies steering taxpayer stimulus dollars to allegedly “shovel ready” jobs and politically connected firms such as Solyndra.
At the same time as we liberate capital to create new jobs, we must liberate taxpayers from the IRS tax code, which is why my jobs proposals also call for an optional flat tax of 15 or less%. All workers and businesses would have the freedom to choose each year to file their income taxes either under the new flat tax option with limited deductions or under the current U.S. income tax code. Anyone who strongly favors a deduction or credit under the federal government’s current complex income tax system would have the choice to keep filing that way.
This optional flat tax system will create a new personal deduction for every adult of $10,000 to $12,000 (double for married couple), which would be above the established poverty level at $40,000 to $48,000. The current $1,000 tax credit for each child age sixteen or younger would also apply, as would the current earned income tax credit (EITC).
Gingrich has been floating an optional flat tax for a couple of years, although it hasn’t had much traction as the former Speaker hasn’t gained much in polling. Here’s a brief thumbnail comparison between the two plans:
It would seem that Gingrich’s plan would hit lower-income households a little sooner than Perry’s, but they would also have the option of staying with the current tax code (as they would with Perry’s plan, too). The corporate and personal tax rates would be significantly lower under Gingrich’s plan, and that may make it more difficult for Gingrich to claim revenue neutrality without a huge jump in economic activity. Both, however, share a remarkable amount of similarity.
So which is better? I’d argue that both are good; I like Gingrich’s rates overall, but Perry’s exemption model for personal income would be an easier sale to lower income families. Both beat the idea of adding a national sales tax. Apart from the merits of each, I think Gingrich will have an easier time selling and defending his plan in debates and on the stump than Perry, who has struggled to respond to challenges.
Let’s test the two with a poll for Hot Air readers. Whose plan is more attractive?
Update: Gingrich tweeted out a challenge to Perry:
@GovernorPerry If u r going to bump plans w/ my friend Herman, then you can bump plans w/ me. Let’s compare flat taxes
Gingrich does just that on his website. The biggest difference is in the treatment of capital gains. Gingrich exempts all of it from taxation; Perry only does so for long-term capital gains. Perry’s plan — according to Gingrich — still taxes short-term capital gains at 35% in some cases. I’m not sure whether it’s all that good of an idea to exempt short-term cap gains from taxation; it would accelerate the kind of short-term profit-taking that has created plenty of problems for long-term growth strategies in corporate boardrooms and reward speculation, but I don’t think a 35% rate on those gains is a good idea, either.
RE: I prefer Paul’s plan. Eliminate the IRS. Take the income tax rate to zero.
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And then what? Surely Ron Paul isn’t advocating ZERO government. If not, how does he intend to fund what he believes is necessary? By what means?
Talk is cheap, what’s Ron Paul’s plan?
RE: I think Paul’s plan (eliminating the IRS) is good, but I don’t like much else about him.
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OK, so he eliminates the IRS...
And then what? Surely Ron Paul isn’t advocating ZERO government. If not, how does he intend to fund what he believes is necessary? By what means if we have no income tax?
What’s Ron Paul’s plan?
So Perry’s plan is basically Gingrich’s plan with some minor tweaks? Hey Rick, why did it take you so long to copy Newt’s plan? Looks like you copuld have done this in a few hours.
copuld = could.
A few details on how Newt created the housing bubble would be nice. Just saying .....
There are other ways of collecting taxes. The Fair Tax is basically a sales tax. It may be high, but there’s no income tax. Obviously, there are a lot of details to be worked out.
But I don’t like any plan that has (a) both an income tax AND a sales tax; or (b) an income tax that may be manipulated to look lower but is only going to get higher.
As long as there is an income tax, any kind of income tax (especially one deducted before most people ever even see the income), it will get higher and higher and higher.
Newt debating Obama.. that alone would crush the big O. Newt’s chances of winning the general are, at this point, I think as good as anyone elses. Thats one of the reasons I am leaning more and more towards Newt.
Agreed.
If the election were held today, Newt would get my vote.
I am very much leaning towards supporting Newt. I sent him a small amount the other day, and I talked to my parents, and found that my Dad is leaning the same way. We hadn’t even talked about it or the debates, so I found that interesting.
I do think that Newt needs to come out and acknowledge the baggage that he has. I’ll be the last person to condemn him for any of it, but he can’t go around talking about “Calista and I” all the time as if they are somehow the poster couple of marriages. I think he could find a way to do it in the form of a speech that would be well received and would insulate him from a lot of the criticism that will come his way. I honestly think Newt could get the nomination without doing that, but he wouldn’t want to be asked about it for the first time at a debate with Obama, who looks like a family values advocate compared to Newt. If he acknowledges it now and speaks openly and honestly about it, then if it comes down to him getting the nomination, he can always just say, “well, I discussed this in my speech in November, and I don’t have much to add to that, except that I’m grateful that I’ve been given a chance to show that I have learned from my mistakes.”
He already did a mea culpa. He went on Pat Robertson’s show and explained that his vast patriotism caused him to cheat on his wives.
And then there’s his “middle of the road on amnesty” speech from last week.
I too sent Newt a little money and last month I started talking Newt up to friends. I live in liberal Montgomery Cty, MD the most liberal county in the USA. You can’t even smoke in your own condo and no santa either. Anyway, at first everyone told me a was crazy in the head to consider Newt. Lately, ppl are listening and I’m not appearing so far fetched anymore. My aunt, who is a Michigan delegate, listened to my argument for Newt yesterday and was surprised by how much she didn’t know about Newt. I argee the personel stuff hurts him a bit especially with women but these are scary times. We dont have much time to fix everything if we can get a real conversative pres and large majorities in senate and house the USA has a chance. This isnt the time to play it safe. The media is scared of Newt too.
Agree.... the buzz about Newt seems to be increasing quite a bit. I have been on this website for a while, and it was so over-the-top anti-Newt Gingrich it was ridiculous. But lately.... it seems a LOT of people here are giving Newt a second look. All the candidates have flaws, but Newt’s positives far outweigh his negatives. ...and the fact he will trail Obama around the country demanding he commit to the seven, 3-hour Lincoln Douglas debates just shows how much confidence he has that he can clearly win the argument in front of the entire country. No other candidate would attempt such a thing.
“And then what? Surely Ron Paul isn’t advocating ZERO government. If not, how does he intend to fund what he believes is necessary? By what means?”
Like I said use it as the open bargaining point. Maybe we end up settling somewhere between 10%-15% flat tax. Better than starting at 20% and going up from there. With all the deductions, many people already pay less than 20%.
Sadly; Newt is the only one of those running who 'gets it'. We are fortunate to have a candidate who needs no 'on the job training'; a Conservative with a 'vision' plan for America's recovery and he is dismissed out of hand; in favor, of what seems; almost a 'designer' candidate option.
Is Newt perfect; no. ..but he is far more perfect than the rest of what is our ill-equipped - by comparison - candidates.
The sheer shallowness of our Party, right now; is pathetic. IMHO. . .
Exactly—
But Newt’s “baggage” starts to look pretty small compared to the problems of the other candidates. Especially when you consider his good points.
I could never vote for him. Just another RINO.
Most importantly; he knows our history; and the choices we must make to insure we do not repeat the worst of it. Newt does recognize America's enemies.
I did a little googling and did not find much, Newt left Congress in 1998 almost 14 years ago, 10 years before the melt down. I am not buying Newt is responsible for the Fannie Freddie mess.
There to celebrate the Fannie Mae commitment was none other than Newt Gingrich..."Fannie Mae is an excellent example of a former government institution fulfilling its mandate while functioning in the market economy. Fannie Mae has had a regional presence in Atlanta for over 40 years and the announcement of a partnership office demonstrates it's continued commitment to affordable housing in the Atlanta metropolitan area."
Newt's just a big government guy. Makes sense. Why would anybody be interested in reducing the importance of their life's work? Why didn't Republicans disarm this bomb all the years they had control? For the same reason Newt gave this speech at a Fannie Mae event.
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