Rand Paul maps quick path to balanced budget

washingtontimes.com ^ | 3 22 2013 | staff

[BarnacleCenturion]

Sen. Rand Paul formally rolled out his 2014 budget blueprint on Friday, offering a combination of tax and spending proposals that he said would balance the federal budget in five years without raising taxes.

The freshman Kentucky Republican’s plan reshapes entitlement programs, abolishes four federal agencies and overhauls the federal tax code by establishing a 17-percent flat tax and eliminating taxes on capital gains, dividends and savings.

[BarnacleCenturion]

The spending proposal the freshman senator outlined Friday would put the nation on a path to a balanced budge five years faster than the plan that House Republicans adopted last week. The unveiling came as the Senate was debating a Democratic budget that would leave a major deficit even after 10 years.

The House Republican budget, authored by Rep. Paul Ryan, the 2012 GOP vice presidential nominee, would spend $3.5 trillion next year and $41.5 trillion over the next decade, compared with tax revenues of $3 trillion in 2014 and $40.2 trillion over 10 years.

Mr. Paul’s budget would spend $3.2 trillion next year and $37.6 trillion over ten years, compared tax revenues of $2.5 trillion in 2014 and $37.9 trillion over 10 years.

Mr. Paul’s budget allocated $526 billion for national defense in 2014 and $5.6 trillion for national defense over the next 10 years. The House GOP budget, meanwhile, sets aside $579 billion for national defense in 2014 and more than $6 trillion over the next 10 years.

Mr. Paul, as well as GOP Sens. Ted Cruz of Texas, and Mike Lee of Utah, joined Democrats Thursday in voting against the Ryan House budget — arguing that the plan did not go far enough in getting the nation’s fiscal house in order.

[Izzy Dunne]

Step #1: Admit that you have a spending problem.

They haven’t gotten to that point yet.

[ecomcon]

Mr. Paul’s plan abolishes the Departments of Energy, Education, Housing and Urban Development and Commerce, and privatizes the Transportation Security Authority.

I will vote for this man.

[aMorePerfectUnion]

10 years. Not quick.

[Hostage]

Some good views on what needs to be done but the tax reform will not last because the tax code will be amended and amended and amended ad infinitum as it has in the past. A ‘Flat Tax’ never stays flat. Get with the FairTax tax for lasting reform.

[The Wizard]

sounds good to me.

[Georgia Girl 2]

The first legislator to ever advocate shuttering a govt agency.

I stand with Rand.

[sand88]

The first legislator to ever advocate shuttering a govt agency.

Reagan campaigned in 1980 on specifically eliminating the Department of Education. Of course, with a Rat Congress and RINOs, it didn't happen once he was elected.

[X-spurt]

My reps, Cruz and Gohmert, both have and so have others like Rand Paul. A dam break starts with a trickle.

[X-spurt]

For now, I too say Rand is da man.

Someone is coaching this guy right, he’s laying a hard to beat foundation for a serious run in 2016. Hopefully 2016 campaigns won’t turn into a GOP circular firing squad like 12.

Guess in Rand’s case his acorn fell just far enough from the Paul tree to retain the good stuff while missing the nuttiness.

[ROCKLOBSTER]

Paul’s plan reshapes entitlement programs, abolishes four federal agencies...

It needs to abolish as many DEPARTMENTS of the Executive Branch, never mind "agencies".

There are thousands of those.

[ROCKLOBSTER]

A ‘Flat Tax’ never stays flat. Get with the FairTax tax for lasting reform.

How about the "No Tax" plan?

Where the federal government bills the states for the federal services they choose.

[rhubarbk]

Re-establish the work requirement for welfare recipients plus add the abolishment of the EPA and I think we have a winner.

[rhubarbk]

I could not agree more regarding the FairTax.

[Georgia Girl 2]

I’m nitpicking here but Reagan wasn’t a legislator.

[ex-snook]

WWJD?

[justlurking]

It also indexes Social Security so the benefits for low-income workers would grow faster than those with higher incomes[...]

Social Security is already a raw deal for higher income workers. It already makes a massive transfer from high income to low income retirees:

How to read this chart: The ratio is the comparison of the cost of a career of contributions to Social Security, compared to the value of the benefits received if you live to 84 after retirement. This is average life expectancy at 67.

If the ratio is above 100%, you get more than you put in. If the ratio is below 100%, you get less. The value of money is taken into account with each line: They range from -1.0% to 2.0%. This is the rate of return after inflation.

Government T-bills have averaged about 0.5% above inflation for the past 30-40 years, so you can use the purple line to compare what Social Security should return. And you can see that the line crosses 100% at about $4,700/month -- very close to the median income. If your average income is above that, you are essentially giving up part of your Social Security contributions to the recipients below it.

[justlurking]

overhauls the federal tax code by establishing a 17-percent flat tax and eliminating taxes on capital gains, dividends and savings.

This alone makes this politically nonviable. The political class would never let investors escape taxes.

A better proposal would have been to index capital gains for inflation, so that only the real gain is taxed and not the paper gain due to the devaluation of money. Eliminate double taxation of dividends by making them a deductible expense for corporations, and dividends would only be taxed once at the individual tax rate.

Under these circumstances, the flat tax rate could be lowered even further.

[Hostage]

You are referring to a direct tax as provided in the original articles of the Constitution regarding taxation.

Such a plan must be done with apportionment but the 16th Amendment allows the federal government to do a direct tax without apportionment. Therefore, such a no-tax plan would never be sold to the states. Also the federal government billing the states would entail the states putting a levy of federal tax on people and businesses, so it would indeed be a tax plan.

The FairTax code does what you are suggesting by allowing the states to collect federal sales taxes but it also abolishes all the income tax code and endures only if the 16th amendment is repealed.

With the FairTax people will have the choice to be taxed or not. It’s much better than billing states directly.