(CNN) -– Texas Gov. Rick Perry will propose giving Americans a choice between their current income tax rate or a 20% flat-tax rate when he announces part of his plan for the economy Tuesday in South Carolina.
Perry laid out his intentions in an op-ed piece in the Wall Street Journal that was published Monday evening. The plan is titled “Cut, Balance, and Grow.”
“The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate,” Perry writes in the article. “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.”
Perry first announced his intention to offer a flat-tax plan last week, but did not offer any specifics about the rate.
One of Perry’s key assertions is that a flat-tax will make it easier for Americans to file their tax returns.
“This simple 20% flat tax will allow Americans to file their taxes on a postcard, saving up to $483 billion in compliance costs,” Perry wrote in the Wall Street Journal.
He emphasized the plan would create a better environment for creating American jobs.
“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 wrote.
The Texas governor also will propose lowering the corporate tax rate to 20%, a significant decrease from the current rate of 35%. The Perry plan would also eliminate the estate tax, commonly referred to by Republicans as the “death tax.”
Perry also plans to eliminate taxes on long-term capital gains and qualified dividends, as well as taxes on Social Security benefits.
In his op-ed piece, Perry also stressed the importance of reducing the federal debt, setting the goal of balancing the budget by 2020.
“It will be an extremely difficult task exacerbated by the current economic crisis and our need for significant tax cuts to spur growth,” Perry wrote. “But that growth is what will get us to balance, if we are willing to make the hard decisions of cutting.”
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A flat tax with exemptions for mortgage interest, investments, social security income etc, etc, etc.....doesn't really seem like a flat tax.
Perry is Bush 2.0 – give everyone a tax cut, pretend there is "growth", and watch the national debt double again.
Rich get richer and the poor get poorer.
How about scraping the 3,000 pages of tax code and having a one page tax code: 5% on the first $100,000; 10% on the next $100k; 20% on the next $100k; 30% on the next $100k; 40% on the next $100k; 50% on the rest of your income. No deductions, no exemptions, no capital gains, no tax breaks, no loop holes. Income is income no matter where it comes from.
So, increase the tax on the poorer people, decrease taxes on the rich, and give business an almost 50% cut in taxes. This guy republican by any chance?
If Obama had proposed this, the Perry camp would be all over it, criticizing every element. Except that a non-Republican would never lower the corporate tax rate that much.
Well if its optional, I opt not to pay it. Now make that plan available on all taxes, and you've got my vote.
I think it's a smart move on his part after Cain's 9-9-9 plan imploded when we all found out the 9 % sales tax would be on top of any tax your state already has in place ! Cain had me fooled but now why would I want to pay 17% sales tax 9 % being Cain's and the 8 % my state already has in place ? That sure wouldn't put more money in my pocket..........lol
This sounds like a disaster. If your current tax rate is >20%, you choose the optional flat tax. If it's lower than 20%, you choose the current system. For this to be viable, Perry must propose significant cuts in programs, as this will significantly reduce revenues. Otherwise, this is just an idiotic plan that will put this country into more debt.
So the people that are now paying more than 20% (the wealthy) get to decide to pay less if they want to, and the rest of us continue to pay what we already pay. Such a deal.
I'm only glad that GOP nominees have no chance in the general election. Sure, lets add another tax system on top of the existing tax system. Let's also give a menu of tax choices so those over a 20% effective tax rate can just "opt-out". Let's just give the wealthy more tax cuts & ignore unemployment.
This helps the rich more than anyone.