Okay, so taxes are an important issue in the GOP. Tax plans, as a Presidential candidate, are important. It serves to show people what you plan to do, and how you would like to go about it. Let’s look at Randal’s, which was recently released.
- Flat rate of 14.5%
- Applied to both personal income and businesses
- Major cuts in deductions
- Would mean $2 TRILLION in spending cuts
- Grow the economy
The tax rate for personal income would be set at 14.5%. That’s it. This would apply to:
- Capital Gains
There would only be two deductions left to be claimed. The rest would be completely eliminated. They are:
- Charitable Contributions
Things that are good to know:
- The first $50,000 of income for a family of 4 would not be taxed
- The Earned-Income Tax Credit would be retained for low-income families
The rate would still be set at 14.5%. Here’s how it’d work:
- Levied on revenues
- There would be allowable expenses (such as parts, computers, office equipment) that would be subtracted from the revenues.
- Capital purchases would be immediately expensed, ending complicated depreciation schemes
What Would It Do?:
These are the Senator’s own words now:
“The immediate question everyone asks is: Won’t this 14.5% tax plan blow a massive hole in the budget deficit? As a senator, I have proposed balanced budgets and I pledge to balance the budget as president.
Here’s why this plan would balance the budget: We asked the experts at the nonpartisan Tax Foundation to estimate what this plan would mean for jobs, and whether we are raising enough money to fund the government. The analysis is positive news: The plan is an economic steroid injection. Because the Fair and Flat Tax rewards work, saving, investment and small business creation, the Tax Foundation estimates that in 10 years it will increase gross domestic product by about 10%, and create at least 1.4 million new jobs.
And because the best way to balance the budget and pay down government debt is to put Americans back to work, my plan would actually reduce the national debt by trillions of dollars over time when combined with my package of spending cuts.“
Let me put up a few possible objections, and then go ahead and address them.
“But the rich will be taxed less than everyone else!”
To quote the Senator, “Though the rich will pay a lower rate along with everyone else, they won’t have special provisions to avoid paying lower than 14.5%.” Even though they won’t be paying as much as people thought they were before, they won’t be able to pay lower than that 14.5%.
“But what about deductions?”
As stated, there will only be the two stated earlier in the post. There won’t be any other deductions then. Those two will be it. There wouldn’t be any special one’s for rich people, corporations, etc…
“But what about the special interests!?”
Steve Forbes ran with a flat tax idea in 1996. t was liked by voters for it’s simplicity it’s capacity to help the economy. Cronyists didn’t like it. But this isn’t 1996 now. The GOP of then isn’t the GOP of now. Now, Conservatives are a lot more anti-corporate welfare than before, and I see it becoming more popular within the party too.
This plan relies on two things: electing competent people to office who are willing to stop the expansive growth in government, and their constituents making sure they do what they said they were going to do. Without either of those two, this plan may seem nice, but it’d be bound for deep troubles.
“Why should we do follow along and support this?”
Because it’d mean more money in your pocket for you to control at the end of the day. It means people will be able to build their savings, plan for retirement, set money aside, not worry as much, and be able to live a better life. That’s what it means. At the end of the day, it means you being able to live and do more as you please.
Noteworthy people to mention in bringing this to life:
Steve Forbes (Forbes)
Stephen Moore (Heritage Foundation)
Arthur Laffer (Former Reagan Economist)
Rand Paul (R-KY)
Information from Opinion piece in the Wall Street Journal