The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate. 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.
Steve Forbes has endorsed Governor Perry for President and endorses his economic plan. Forbes' plan when he ran for President himself, you may remember, was for a 17% flat tax. The Perry Plan, is 20% and keeps mortgage deductions, state and local sales tax deductions and charitable donation deductions.
Perry's economic team presented the plan to bloggers in a conference call before Perry spoke. Here are some highlights:
The plan eliminates taxes on capital gains, the estate tax (death tax), and taxes currently in place on social security income.
The corporate tax rate would be 20% and eliminate loopholes.
Perry would declare a moratorium on all pending regulations and audit all regulatory measures taken since 2008. Federal regulations would sunset unless Congress renews them annually. He would implement an easy and identifiable, searchable federal regulatory data base. An annual regulatory budget would have to be submitted by each agency.
There is no VAT or Federal sales tax.
Social Security must be improved and enhanced for all generations. Those currently on it will not be affected. Treat the Social Security trust fund as the highway trust fund is run - protect the funds and only use the funds for that program. Younger workers would have the option of investing in personal IRAs. The age requirement for benefits would be reformed using life longetivity statistics.
He chose 2020 as the date for achieving a balanced budget though he calls for an immediate Balanced Budget Amendment. He reasons that it cannot be predicted when Congress would pass that amendment so 2020 would be a legitimate date.
The Perry plan brings Medicaid back to states responsibility. No more begging the federal government for waivers.
On Medicare, he would work with those who have presented reasonable plans - such as Rep Paul Ryan and Senator Tom Coburn and Senator Joe Lieberman. Preserve current benefits, increase eligibility requirements to reflect life expectancy, bring market forces to the program and reform waste, fraud and abuse in the system.
Automatic government shutdown protestion - no using troops or senior citizens as bargaining chips. Ban earmarks. Emergency spending only on emergencies. PAYGO - only spend on a program if another of equal or greater amount is eliminated. No more government bail-outs. No federal government worker raises.
Repeal Obamacare. Repeal Dodd-Frank. Repeal Sarbanes-Oxley.
Now is the time for bold steps, not the time to be timid. A President will never achieve what he/she wants unless they shoot for it and set the bar high. There is no need for class warfare - creating jobs is the way to increase tax revenue.