(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.”