(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."
Rand Paul: GOP must reconnect with African Americans
Help the winners, make the people who are really hurting fend for themselves (because... Freedom!) or just pretend they will magically go away - sounds like a typical GOP plan to me!
Rand Paul is a socialist, communist, Marxist socialist. Who knew that libertarians were really the wealth redistributors?
"Hey sniffy.....we're already bankrupt....take a look at the financial numbers.......get a clue......"
Hey True, no we're not...the country and federal gov't are more than capable of servicing our debts. Get a clue.
"Not to mention that when Sen. Paul went to Howard University earlier this year he tried to whitewash his position on the Civil Rights Act of 1964."
Even more bizarre was when he asked an audience full of well-educated African American students whether they knew that Lincoln was a Republican...all as part of the GOP/Teatroll sales pitch that "we're the REAL party of freedom from slavery and minority rights." The looks on the kids' faces were hilarious.
Translation: I want to set up areas where corporate raiders can scoop up land cheap, pay almost no taxes, and rape the local economy.
Translation: I want to allow corporations to scoop up land cheap, pay little or no tax, and rape the local economy.
Not sure if Rands plan will work but I haven't heard of a better solution yet other than sell to Canada. I simply hope that the tax incentive attracts more than globalist retailers/fast food joints which are not likely to provide much more than tons of minimum wage jobs.
There is no reason for any of this: Obama saved Detroit and Obama promised that Detroit will never go bankrupt. Of course, for decades Detroit has received more Federal money for schools, roads, infrastructure than any other municipality or state for that matter with absolutely nothing to show for any of it. It just evaporated. Yea, Democrat rule! Yea!
Is that the same guy who said "I think we'll win this" referring to the government shutdown?
OK libs.. let detriot burn to the ground then
Here's the real reason Paul wants to do this, then watch how many millionaires move to these so called "enterprise zones". "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." Furthermore, wasn't it Paul that said free market solutions are best and that the federal gvt. shouldn't rescue Detroit? Now he's like a vulture flying over searching out the scraps.
Rand Paul STILL perpetuating the myth that tax cuts pay for themselves...
Obama "I will not let Detroit go bankrupt ! Period! " hahahahaha. Read my lips!
I just read a book that had kinda the same kind of plan. They did not call them enterprise zones, but burgs (short term) because they were free of taxation and interference from the king, because basically they fed huge parts of the kings coffers. The biography was Robert The Bruce, and it took place in 1294. Didn't work out too well for Long Shanks then either. He was just looking for ways to fund wars with Wales, France, and then Scotland, kinda just like today. Pesky little people got in they way of capitalism then too because they wanted something silly called Freedom. Original ideas?
Why is it all I hear is tax breaks for corps who are hoarding record profits? Boeing is working over states so they don't have to pay any taxes while their workers taxes will probably go up due to all the extra expense they will have to put out to build up infrastructure to make the plant/workers happen! GE had a net TAX CREDIT of $4.3 Billion in 2011! That means they not only didn't pay any taxes, they profited off the taxes! Go figure and yet they cannot afford to pay workers more while earning record profits!
Similar zones have been used in many parts of California. In California, they were called Economic Enterprise Zones. Mostly setup in areas where there was high unemployment, and high labor force. It works. But tax payers have to pay for it, as taxes not collected from that area has to come from somewhere else.
It is interesting that Rand Paul would suggest such a liberal measure to help a depressed area. The GOP Tea Party standard procedure is to let the poor suffer. So, this must be a new trend!
This is another "promise lower taxes" and a year later, it's "Whoops, We don't have enough money to pay teacher, police, and firemen salaries so layoff time!!" If Rand Paul is so gung ho about doing good for the unwashed masses, why doesn't he look in his rumpled state of Kentucky? Got to be some backwater cities in need. Sounds like another GOP trickle down, let big business and the rich get a tax break and no jobs get created. Gee, does this sound like an opening salvo for a President wannabe??
We need to keep a close watch on who buys into these enterprise zones. Right now China is wanting to build an entire Chinese city in upstate New York. This city will be vertically ran by the Chinese. It would actually be a country within our country. They want to build an amusement park, and houses for rich Chinese who will donate $500,000 to the project (this amount will also give them a green card). They will have their own school, college, possibly hospital and who knows maybe even their own law enforcement. There will be hundreds of small apartments in the city which will end up housing workers they bring over here from china. Does anyone see the danger in these enterprise zones? I have no problem with them building a factory here in American, but their own city...NO WAY!!
Paul needs to focus on his problems in KY, as he knows nothing about an industrial state with highly skilled workers. Paul however is an expert at keeping wages at walmart levels in his own state.
Rand Paul is who the Democrats want as the Republican leader in 2016. He's exactly the what is wrong with the entire Republican party. Please do the all of us who are now Democrats a huge favor and get behind this idiot. What happened to The Republican Party? Where did it go? I considered myself independent for the last 40 years, but now there's no way I would want a Republican to be the dog catcher. Good job-kiss your party goodbye.
Tax cuts and deregulation of banks and businesses are 2 ways that Republicans have nearly destroyed this country. We can all thank Reagan in particular for that, but Bush sure helped as well with his tax cuts simply helping the rich get richer which is what is killing the country. Economic stratification is what will destroy this country before my life is over. The poor are poorer than they have been in nearly 80 years and the rich are richer than they have EVER been. Government has to be heavily involved in dealing with poverty, not just cutting some taxes and thinking society works itself out. The conservative sociologist Spenser who coined the phrase "survival of the strongest" had that mindset and society just kept falling apart around him as societies initially did that throughout the Industrializing world of the 1800s.
They do this in Ohio. It's not all that bad. The give tax breaks to those who work in those neighborhoods as well as for hiring anyone who lives in these zones.
Do you understand how the private economy really works?? $1.3 trillion in stimulus is good but tax incentives for actual privately own businesses that are not paying taxes now is bad but may pay in the future if successful. It is thinking like Richards is why the economy is stuck.
The top 1% of taxpayers already pay 39% of all of the Federal income tax yet only earn about 13% of the taxable income. You people will never understand economics. We want those people to invest the US instead of overseas.
Liberals must really hate the poor so much that they don't even care if the poor or anyone else have job opportunities.
The liberal policies destroyed this one great city.
His plan is to cut taxes on the rich and raise taxes on the poor and middle class. He will call it something else, describe it as something else, and spray it so it smells like something else. At the end of the day he will do what all Koch slaves do – lower taxes for his employers.