Rick Perry, in an op-ed in the Wall Street Journal, announced the contours of his “Cut, Balance, and Grow” plan, which will give taxpayers a choice between a flat tax rate of 20 percent or to stay in the current tax system, cut corporate tax rates to 20 percent, and cap spending at 18 percent of GDP.
According to Perry, the “new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents” and also “abolishes the death tax once and for all, providing needed certainty to American family farms and small businesses.”
“This simple 20% flat tax will allow Americans to file their taxes on a postcard, saving up to $483 billion in compliance costs,” Perry writes. “By eliminating the dozens of carve-outs that make the current code so incomprehensible, we will renew incentives for entrepreneurial risk-taking and investment that creates jobs, inspires Americans to work hard and forms the foundation of a strong economy.”
Perry states that his plan will restore “American competitiveness in the global marketplace and provides strong incentives for U.S.-based employers to build new factories and create thousands of jobs here at home.”
To do that, Perry’s plan calls for the lowering of the corporate tax rate to 20 percent, encourage the repatriation of assets “parked overseas” by lowering the rate to 5.25 percent, and a transition to a territorial tax system which would tax only in-country income.
Further, Perry’s plan will “eliminate the tax on qualified dividends and long-term capital gains to free up the billions of dollars Americans are sitting on to avoid taxes on the gain” and “establish a clear goal of balancing the budget by 2020.”
For younger workers, Perry’s “Cut, Balance and Grow” plan would allow them “the option to own their Social Security contributions through personal retirement accounts that Washington politicians can never raid.”
“Because young workers will own their contributions, they will be free to seek a market rate of return if they choose, and to leave their retirement savings to their dependents when they die,” Perry writes.
Perry, who has plummeted in state and national polls, will announce the full details of his plan in South Carolina on Tuesday, where he will be endorsed by South Carolina’s Speaker of the House Bobby Harrell, according to a FOX News report.