Rick Perry has found himself at the bottom of the second tier after what seemed like a cake walk to the presidency. But the Rick Perry bankroll has pundits on the ready for the next move upward. On Monday, Perry tickled the media with a preview of his 20/20 Flat tax. His overall plan which is named “Cut, Balance and Grow” seems much less catchy, especially if he has his eye on a primetime ABC host slot.
If one were going to summarize the plan, they might suggest that Perry believes in “caps”. His 20% flat tax is optional, so essentially everyone paying more than 20% currently can move to 20% while everyone paying less can still pay their current rate. It also moves the corporate rate to 20%, kills the death tax, and removes taxes from qualified dividends and capital gains. The plan also includes capping spending at 18%. I believe talking about caps on spending as a percentage of GDP are a mistake for the simple fact that if you do this, what are the odds that congress will ever spend less than this amount? Then again, after what we’ve seen in the last three years, it doesn’t sound half bad.
James Pethokoukis breaks down Perry’s plan over at The American:
—A choice between a new, flat tax rate of 20 percent or their current income tax rate.
—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.
—Abolishes the death tax once and for all, providing needed certainty to American family farms and small businesses.
—Lowers the corporate tax rate to 20 percent—along with a tax holiday for foreign earnings—and moves toward territorial taxation.