Rand Paul has ideas to help out Detroit
December 5th, 2013
04:26 PM ET
11 months ago

Rand Paul has ideas to help out Detroit

(CNN) - Sen. Rand Paul of Kentucky will travel to Michigan Friday to announce his plan to rescue the Detroit, the largest U.S. city in history to enter bankruptcy.

The potential GOP presidential candidate said Thursday on a conference call with reporters that he'll introduce a bill next week that would enact what he calls "Economic Freedom Zones," or, as he put it on Fox News, "Enterprise Zones on steroids."

Enterprise Zones have been in effect in multiple states for decades and they've seen support by lawmakers from both parties. The idea is to give tax incentives and financial breaks to depressed areas and neighborhoods in large cities, with the ultimate goal of stimulating the economy and drawing in more business.

In New Jersey, for example, businesses in the state's 32 designated Enterprise Zones enjoy a reduced sales tax of 3.5%, tax free purchases on items such as capital equipment, and other tax credits-such as an energy sales tax exemption and an 8% corporate business tax credit.

For Paul, he wants to take it to the next level. In places where the unemployment level is at or greater than 1.5% of the national rate, the Senator wants to create taxes "so low that essentially you're able to bail yourselves out."

The bill would reduce income taxes to 5% and eliminate capital gains taxes. The payroll tax would also go down for both the employee and the employer, he said.

The key to the bill, however, is that only businesses that are seeing success would enjoy the benefits.

"The money will go back to people who the customers have already voted for, businesses that are making a profit," he said on the conference call, saying it makes more sense to fuel growing businesses rather than try to save failing ones.

But it's not a government stimulus, he added.

"A government stimulus takes money from one area of the country, brings it to Washington then somebody, a central planner, has to decide who to give it to," he said. "The problem is central planners never are smart enough to know which entrepreneurs will succeed or which are the best in the business, so they typically give it to the wrong people."

Paul acknowledged the plan would mean less money coming into Washington to help pay off the nation's debt, but he argued the law would create jobs and he predicted both chambers of Congress would pass it.

But why is a Senator from Kentucky trying to solve problems in Detroit, Michigan?

Paul said he envisions the plan being a model that could play out in other cities, including poor areas in Kentucky.

While in Detroit, Paul will help open the Republican National Committee's new office in the city-part of an effort to expand the GOP's outreach to African Americans and urban voters.

"We have ideas of how to help people who live in cities," he said. "I think Republicans as a party, myself included, need to do more in the cities."

Rand Paul: GOP must reconnect with African Americans


Filed under: Michigan • Rand Paul
soundoff (69 Responses)
  1. just wondering

    these people never learn by their mistakes... drama queens all the way

    December 5, 2013 09:37 pm at 9:37 pm |
  2. termlimits

    Socialist eletists always believe the purpose of ideas is to fool people too stupid too think! Imprison yourself in a highchair and slurp your strained peas.

    December 5, 2013 09:40 pm at 9:40 pm |
  3. YUCK

    Rand Paul should've done this along time ago,also any move that the klan makes shouldn't be trusted.

    December 5, 2013 09:56 pm at 9:56 pm |
  4. S. B. Stein

    The problem with that is that it doesn't guarantee that employers will go back to Detroit. What I don't think Paul really understands is that just because taxes are low that people are going to start something in that location. Is there a place to do business? Are there properly trained people to do the job? These are just a few of the other considerations that employers think about with more unmentioned.

    December 5, 2013 10:02 pm at 10:02 pm |
  5. Morons

    So its ok for Jobs to leave one area and move to a poorer area for large tax breaks. So big business wins and hard workers lose. Grats all America is sucking more than normal

    December 5, 2013 10:23 pm at 10:23 pm |
  6. Brian in DC

    Or we can do the alternative, let it rot into even more of a cesspool then the Dems left it in.

    December 5, 2013 10:40 pm at 10:40 pm |
  7. Conservative398

    It is truly embarrassing reading the liberal comments on this board.

    Let's get the facts straight. Since the 1940's Liberals have been running our policies in inner cities. You created nanny states where working was no longer something to value and any effort to hold anyone to any sort of morality was labeled bigoted or racist. And now our cities are literally falling apart and the problem isn't the liberals that created it, but the republicans and libertarians who are actually offering solutions...shameful.

    December 5, 2013 10:52 pm at 10:52 pm |
  8. Twainland

    Why doesn't he have any ideas for Kentucky?

    December 5, 2013 11:01 pm at 11:01 pm |
  9. CALIFORNIAMARTY

    The ten most poverty stricken cities in the United States, lead by Detroit are all run by Democrats and have been for decades. Some never had a Republican Mayor.
    Detroit is the poster child for the failure of liberals to create jobs or wealth, just misery and poverty and doles.

    December 5, 2013 11:08 pm at 11:08 pm |
  10. Kinard

    Well you just go ahead and tell the people your big plans that will set Detroit on it's feet. If you do, we'll make sure you get a cookie.

    December 5, 2013 11:11 pm at 11:11 pm |
  11. Theodore Hyczko

    How many mayors from Detroit were from the GOP? Who bankrupted Detroit ?

    December 6, 2013 12:36 am at 12:36 am |
  12. Getoverit

    @Sniffit
    “Paul said he envisions the plan being a model that could play out in other cities”

    Paul said he envisions the plan being a model for the country and federal gov’t, which the GOP/Teatrolls hope to bankrupt in order to get rid of all of its taxes and regulations.
    ------
    Not to worry. Harry Reid will trash any Republican plan. You and your ilk are safe.

    December 6, 2013 01:32 am at 1:32 am |
  13. ObamaFrieds

    My father still has a job because of special tax breaks at the local level for the manufacturer he works for.

    Tax incentives work.

    December 6, 2013 01:36 am at 1:36 am |
  14. Lisa

    He goes into Detroit he wont walk out!

    December 6, 2013 01:38 am at 1:38 am |
  15. mutantsubhuman

    Detroit should be abandoned as a community. Then, the city should be turned into a National Park similar to the Petrified Forest where you can take your children to see the history of political driven economic failure. It would be cheaper to move everyone and every business in Detroit to another town of their choice and just abandon Detroit. The real benefit would be that the politicians that run Detroit would be out of a job.

    December 6, 2013 02:44 am at 2:44 am |
  16. Terence Conklin

    One part at least of his plan makes perfect sense. That is to reduce the payroll tax. I think that it should probably be eliminated entirely. What was sold as a savings for retirement was actually a simple tax on most workers. Today if it were to go, wages would jump 15% or more if the Medicare tax were included. That reduced revenue can be made up in the general tax rate and would have no upper limit. Most high earners don't get "wages" anymore and avoid it completely.

    December 6, 2013 06:00 am at 6:00 am |
  17. Marie MD

    Hey pre 60s racist. Detroit has enough problems they don't need you.
    You don't want to give your own KY citizens healthcare (like your governor) so please stay out of other states.

    December 6, 2013 06:40 am at 6:40 am |
  18. Great Economic Plan

    At last a great idea to help a bankrupt city. No federal bailout and an opportunity for the next ten years to rebuild the city and its economy. Lower the city's taxes and help their economy just like JFK did for our country when he was president. All Obama ever did was tell another lie in his campaign when he promised Detroit would never go bankrupt. As for the morons trashing the idea on this site they're a bunch of ignorant haters that don't understand what an enterprise zone is and the fact that it has worked in other areas of the country.

    December 6, 2013 06:57 am at 6:57 am |
  19. Jim

    Just sucks money out of others to subsidize Detroit. The net effect overall is zero. Wealth seeks tax havens and low cost of labor wherever it is. The factory moves to Detroit, closes down somewhere else. It is called zero sum.

    December 6, 2013 07:24 am at 7:24 am |
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