Rick Perry Tax Plan – It’s a flat tax plan that Rick Perry has proposed to provide broad tax cuts and to create jobs that will stimulate the economy. Whether you’re for Perry or not, it’s the message that the American people want to hear. Rick is one of three Republican candidates that have made a proposal for a flat-tax simple that brings fairness and a simple solution to reduce the size of the American government.
The plan would create a single tax rate of 20 percent for individuals and a $12,500 per-person exemption. Taxpayers could choose that system or file under the existing tax code with all of its exemptions, credits and deductions, a setup that economist Jared Bernstein described as a “complicated beast” that creates parallel systems.
“The thing that makes the tax system complex is not graduated rates,” said Bernstein, a former adviser to Vice President Joseph Biden and a senior fellow at the Center on Budget and Policy Priorities in Washington, which advocates policies that help low-income families. “That’s one of the big misunderstandings of this flat-tax discussion. You can have as many rates as you want and figure out what you owe on a postcard.”
Perry, who has been lagging in the polls of the Republican race, said his plan would simplify tax filing, reduce tax compliance costs and unleash economic growth.
“It reorders the way they do business in Washington by reinventing the tax code,” Rick said in his speech, where he displayed a postcard-sized tax return.
“It just strikes me as political pandering at its worst,” said Leonard Burman, a former Treasury Department official who now teaches at Syracuse University in New York. “It doesn’t seem like a serious policy proposal.”
Low-income taxpayers, who benefit from refundable tax credits for work and children that generate benefits in excess of their tax liability, might prefer the current system. Perry, who has described himself as “dismayed at the injustice” that nearly half of households don’t pay federal income taxes, wouldn’t change that number with his plan, Burman said.
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