(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.”
Cain ad smokin' hot
New video puts Romney and Perry in the ring
Dems call out Romney for foreclosure remarks
The only people this would benefit are those paying above 20% in the first place and it would probably screw the people too lazy to fill out tax forms or too stupid to know that they are paying below 20% before.
What is this guy thinking?
The only way a flat tax works is if everyone pays the same tax (and it would be way below 20%)
Furthermore a real flat tax would require someone making 10k a year to pay the same percentage as 10M a year. only problem with this is someone making 10k a year can't live on 10k a year without taxes let alone with.
But then again that is not my problem, let them starve.
Doing tax reform should make the tax code more simple. Doing a 20% optional flat tax while keeping all of the deductions is not going to work. The idea with going with a flat tax is to get rid of all of the deductions and loopholes, if you keep those in, it's another hand out to special interest and for politicians on both sides of the aisle to abuse, so we end up with the same system we have now.
Between a 20% flat tax, most would be better off on Cain's 9-9-9 plan, at least that will broaden the tax base by increasing revenue from spending by illegal immigrants and those who make money under the table or through black market transactions. Plus you won't see as much of a drop in the cost of goods going from a 26% business tax rate to 20%, compared with dropping to a 9% that will make the effect on the poorest negligible.
It's a muddled tax plan, the Simpson-Bowles deficit commission one was better honestly though. Getting rid of the deductions and lowering rates, broadening the base, and simplifying the tax code is what this country needs economically. We need efficiency and simplicity.
What part of America is below 20% now that would have to increase and what part is above 20% that would benefit? Sounds a bit backwards!!!
I like the 20% flat tax after taking the deductions mentioned. Those deductions are easy to determine. The existing tax system is way too complicated and takes me many hours of time. Then to add insult to injury you have to go back and do it all over again to check Alternative Minimum Tax. Then add state tax returns. The California form makes the federal one look elementary.
Ok-20%-optional- How will they answer what will that do added onto state and local taxes? What about the states like New Hampshire that pay no income taxes?? What about New York where we pay up to 10% in taxes for state, local and federal on purchases?? How will that all be figured in. I believe in flat tax, but lets see how the issues are handled.
That will surely help the rich but what about the average worker?
A 20% flat income tax on a yearly income of $50,000 is $10,000, so the average American taxpayer would be paying the government $834 a month in taxes. I thought republicans wanted to LOWER taxes on the middle-class?
Rick Perry is going to do exactly what he did for Texas, raise taxes on retiresd teachers, fifefighters and police officers fixed iincomes.
Give the rich more, take more from me, cut funding to schools, teachers and police officers! Sounds like a plan Rick!
As long as ALL sources of income get taxed and not just payroll, then I could possibly agree to that.
First thing I've heard from a GOP candidate that's worth consideration.
So people are STILL going to have to go through all that tax code and regulations to see which option is cheaper. Furthermore, this is just going to reduce tax revenue for the government and give more wealthy tax breaks. This is not the right approach at all. Truth be told, I like Cain's 999 plan, because unlike the tax proposed by perry, it will actually simplify the tax code (even though it's totally regressive and will negatively affect most americans).
Another Republican plan to cut revenue and drive up the deficit and debt. Sigh. One would hope they will quit pandering to voters and admit that we have to pay our bills.
Perry knows nothing about economics. No thanks. I'll stick with Ron Paul's real plan. Cut $1trillion and end departments. The government doesn't own me and therefore doesn't own my income. You can get revenue from excise and usage fees.
I don't agree w/ a flat tax or some crazy 999 plan. I support the Fair Tax and killing off the IRS
20% is too high. Hasn't 15% been batted around for years?
Well it's alot better than 9-9-9....but its still trhe same recipe
These canidates look so desperate, trying so hard for nothing, Obamas taking 2012 and then Hillary Clinton in 2016.
What happens when people just decide they dont want to pay ANY taxes!
So basically this is the worst of both solutions. Poorer people, who don't have access to accountants and tax specialists, will be more likely to use this flat tax, which might raise their taxes. Richer folk can still use all the crazy loopholes to lower their rate BUT if that isn't low enough, can then opt for this flat tax. Its a lose-lose plan, that will lower our tax revenues, making it that much harder to pay off the US debt.
I think 20% is too much it should be 15% with no loopholes for the rich and a complete elimination of earned income credit. You should never get a refund greater than the amount you pay in.
Everyone should pay something. Their should be a $200.00 minimum even if you dont have a job. And in no way should you get back more than you paid in. Period. We make due with less than $40,000 a year and have to pay in. I guess I should be more irresponsible so someone will come help me.
So we reduce the debt by bringing in less tax money????? Why would you cut corporate taxes when we have a huge defecit??
More political double-talk designed to cut taxes on the only people who can afford to pay them.
There's not a chance in the world that this flat tax option from Perry will succeed.