Posted on 10/28/2011 1:17:46 PM PDT by smoothsailing
Editor's Note: This column was co-authored by Ken Klukowski, a columnist for the Washington Examiner.
Governor Rick Perry unveiled his plan for fundamental tax reform with an optional flat tax. This bold proposal for economic growth is a fiscal game-changer, and demonstrably superior to the proposals of rivals Herman Cain and Mitt Romney.
In the 1990s, the National Commission on Economic Growth and Tax Reform (the Kemp Commission) chaired by the late Jack Kemp created the framework for a flat tax. This research was later refined and advanced by Steve Forbes, and the flat tax became central to his presidential campaign.
Since then the flat tax has caught on worldwide, especially in Eastern Europe. Fair and predictable, it has led to extraordinary growth. It removes government from the business of picking winners and losers, bringing everyone together to decide on a common tax rate.
Perry has made the flat tax a major proposal in his presidential campaign. It accomplishes the dual primary purposes of tax policy: raising revenue while optimizing economic growth.
The record of nations and states that adopt a flat tax proves its success in fueling prosperity. It does not punish success through progressive escalation of rates, and is stable and neutral in allowing private entities to freely make choices without government incentives or coercing decisions.
It is based on Ronald Reagans supply-side economic philosophy. By spurring economic growth, it increases government revenues. Coupled with cutting spending and a balanced budget constitutional amendment, the flat tax is a vehicle for ending our ruinous debt.
The flat tax also serves the secondary goal of helping the less fortunate. It allows a generous standard deduction and child tax credits to ensure that low-income Americans do not pay and working-income families would only pay modestly. It also rightly focuses on the family as the basic unit of taxation, rather than individuals.
The flat tax is eminently fair. Take Perrys rate of 20%. The well-off truly pay their fair share and pay more than middle-income Americans, because 20% of rich is more than 20% of middle-income.
Perry also deals with the foreseeable questions about deductions for charitable giving and mortgages. While many taxpayers dont itemize their taxes, millions do, and care about those deductions.
There are other popular deductions and credits, however. Excluding them will cause conflict with powerful interests. Voters will need to be persuaded why a flat tax is preferable.
Perry also extends this 20% rate to corporate taxes. This will make America significantly more competitive in the global economy. Temporary incentives will also draw perhaps a trillion dollars from abroad back home.
Contrast Perrys flat tax with Cains 9-9-9 plan. Parts of the plansuch as requiring two-thirds congressional approval to raise taxesare clearly unconstitutional. Other partssuch as taxing state and local governmentsare likely unconstitutional.
Even if modified to make it constitutional, 9-9-9 is not conservative. It creates the risk of permanently burning the candle at both ends with an income tax and a European-style value-added tax. And it either imposes punitive taxes on the poor, or makes then forever beholden to the central government with monthly prebate checks.
And Cains selling point of simplicity is unraveling, as hes now revealing that certain income groups and locales would be subject to different taxes.
A national sales tax is also a gamble. Unlike the flat tax, which has been embraced by numerous countries and produces undeniable results, the sales tax is a black box. Various studies show that 9-9-9 would significantly raise taxes on many, and reports conflict.
But at least Cain gets credit for suggesting something bold. The other major candidate in the race, Romney, is largely taking a status-quo position on taxes, as he is on many other issues.
Romney is suggesting various tax reform measures. Every candidate does. But its nothing on the scale of Perry and Cain. We need fundamental overhauling, not technocratic tinkering.
Americas tax code is counterproductive and a failed attempt at social engineering. Its time for a bold plan proven to foster economic growth. Its time for a flat tax.
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Shhhhhh . . . yesterday I disagreed with RUSH LIMBAUGH on some point! No, wait. I disagreed with Rush Limbaugh AND Mark Levin on some point! On the same day! WOWZER!
The fact that other people are not concerned about the dangers Perry’s plan poses doesn’t mean I just drop pointing out the flaws I can see with my own eyes.
The thing is, very few people who support the Perry plan are even willing to acknowledge that there is an issue that involves the maintenance of the Fedzilla tax code, much less engage the specific criticisms of that aspect of Perry’s plan.
Jim Geraghty has commented on the optional+, as have others. I’ve seen them, you could find them on Google News, I’ll bet.
I don’t like ‘opportunity zones’ in Cain’s system. Who draws the line and how? Nor do I like a sales tax. Its one or the other, income or sales, take your pick. Not both.
At least Perry’s sets up an option (presumably for at least a while). Let the ‘free market’ decide which system people like better. It also reaches down and gets everyone in the system save those that can deduct their way out with the 12K personal deduction.
Regardless, both are better than the current system.
The criteria will be part of the very slim new tax code. It's not like they'll be decided willy-nilly.
Locales who want to voluntarily apply for designation as an OZ would have to first meet the criteria, some of which will be abolishing minimum wage laws (yes!) and implementing right-to-work laws (yes!). If they voluntarily meet the criteria and voluntarily apply, they can obtain the designation.
There actually are plenty of examples of these types of zones that have been in force already for years. For example, a rural area may obtain the designation of an "economic development zone." This gives it some favorable tax treatment under the present code.
So I don't see OZ as really a big deal in the end.
I just can't support the fact that Perry's plan leaves the present corrupt mess in place. And I don't believe it will die on its own. It will just get worse, in my view.
One thing people don’t realize is Perry is very much into each state doing what suits it best. You’ll find that he’s looking to the states rising to their own best practices and ideas.
It’s a bit early to take apart the tax system, that’s a few years out. Right now he’s more concerned with dismantling fed bureacracies and agents railroading growth and expansion.
Once we restore our economy and steam/powerwash out all the commies dragging down the USA should tax overhaul be the topic. Of course he has to address it, but he has much bigger fish to fry right *now*.
I meant as far as articles posted here on FR. Maybe there have been a couple, but most, weirdly, seem to be like this one: just whistling in the dark, as though that that big old Fedzilla tax code issue really isn’t STILL THERE.
Like I said: weird.
Good to hear Geraghty has remarked upon it. So did Podhoretz in the NY Post. He wrote a scathing bit how dumb and corrupt it was to leave the old system in place.
I don’t know why so many seem to want to ignore or duck the issue. It’s there and must be dealt with.
That sounds so very much like a teenage schoolgirl saying, “Stop being MEAN!”
I thought Cain’s newest iteration of his plan was: 867-5309.
:-P
He had nothing to do with McCain's failure to carry Ohio. McSenator Demento lost the state all on his own.
:o)
yeah..20% tax is fair? Give me a break..we should actually have zero tax on income just as the founders had it!
yeah..20% tax is fair? Give me a break..we should actually have zero tax on income just as the founders had it!
Death and Taxes, what a drag.
Bump!!!
But he didn't mean it, so King's X -- you're free of any obligation imposed on you by pushy Perrywinkle smoothsailing and her merry band of Perry Campaign fellow-troupers.
Hey, smooth, how's Clairity doing these days, after being banned for .... what was it, antisemitism? Make her get coffee, okay? Since she's not working FR any more, and all.
A lot of us spend a lot of time on this board and have for years. For some, it’s an obsession, but I’ve never seen any proof that it’s a profession.
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