Rick Perry's Tax Plan Would Be a Disaster for America:
In a nutshell, Mr. Perry would give taxpayers a choice between filing under the current income tax system—with all its flaws—and an alternative flat tax 20 percent system. Under the latter, families could maintain their mortgage deductions if they earn less than $500,000, which is about 99 percent of taxpayers, and could declare exemptions of $12,500 for each family member.
It seems appealing—a simplified tax system, fewer IRS agents, and so forth. But the plan falls short in two important respects—it won’t encourage many better investment decisions and foster growth, and it will spin the federal deficit permanently into the stratosphere.
Alan Viard of the American Enterprise Institute in Washington. He finds the plan confounding in several ways.
First, there’s the idea of giving taxpayers a choice to stay in the current system or opt for Perry’s 20% flat tax. So much for the idea of junking an unpopular tax code rife with loopholes and tax breaks, Viard said.
“It makes no sense from a policy perspective,” Viard said. “If the new system is the better system in which to raise revenue, then everyone should be in it. It's not better to have two systems.”
National Review’s Reihan Salam still wasn’t impressed, calling Perry’s plan “an embarrassment.” He said the plan shouldn’t be called a flat tax, but instead an “alternative maximum tax.”
“Essentially, what Perry has done is reverse the Buffett Rule,” Salam wrote Tuesday. “He has guaranteed that no American will ever pay more than 20% of her income in federal taxes. Indeed, affluent homeowners living in high-tax jurisdictions like New York City and Los Angeles earning up $499,000 will likely pay much less than that, as they’ll continue to have access to the mortgage interest, charitable and state and local tax exemptions.”
The Tax Policy Center doesn’t seem too wild about Perry’s plan either, with the center’s Howard Gleckman calling it a “remarkable free lunch-for-all plan” that scores a 10 on the “pander-meter.”
“At first glance it looks like an attempt to be all things to all people—big tax cuts combined with a promise to balance the budget with– this being campaign season—huge unspecified cuts in spending,” Gleckman wrote.
Please check us out on Facebook and If you like what you see, please "Like" us. You can find us here.