(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."
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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."