GOP presidential candidate Texas Gov. Rick Perry laid out his “bold” tax plan — dubbed “Cut, Balance and Grow” — to “unleash job creation” and “economic prosperity” in Gray Court, S.C. Tuesday morning.
Standing on a podium with reams of paper symbolizing the current tax code, Perry showed what his new tax proposal would allow: A postcard-sized tax return form.
“The size of the current code, which is more than 72,000 pages, is represented by this pallet and its many reams of paper,” Perry said. “The best representation of my plan is this post card, which taxpayers will be able to fill out to file their taxes.”
The plan takes a cue from the flat tax portion of Herman Cain’s 9-9-9 proposal, offering Americans the option of a 20 percent flat tax or their current tax rate, while preserving mortgage interest, charitable deductions and, for individuals, increasing the standard deduction to $12,500.
“‘My Cut, Balance and Grow’ plan reorders the way they do business in Washington by reinventing the tax code and restoring our nation to fiscal health through balanced budgets and entitlement reform,” Perry said. “Central to my plan is giving every American the option of throwing out the three million words of the current tax code and the costs of complying with that code in order to pay a 20 percent flat tax on their income.”
Perry’s plan also eliminates the death tax, stops taxes on qualified dividends and long-term capital gains, and ends taxes on Social Security benefits.
The “Cut, Balance and Grow” plan also will reduce the corporate tax rate from 35 percent to 20 percent, and devises initiatives to make corporate tax avoidance less appealing.
“My plan offers incentives for corporations to invest in America again, with two major reforms. First, we will transition to a territorial tax system on corporate income earned overseas. This means companies pay the appropriate corporate tax in the country where income was earned, but aren’t taxed a second time when that income is moved back into the United States,” he said. “Second, for all corporate profits currently languishing overseas, I will offer a one-time reduced tax rate of 5.25 percent for a limited period of time on repatriated earnings.”
The Lone Star governor also promised to bring spending under control — with a goal of balancing the budget by 2020 — by capping federal spending at 18 percent and passing a Balanced Budget Amendment to the Constitution “to truly protect taxpayers.”
In order to meet his 2020 goal, Perry would place a salary and hiring freeze on federal civilian employees until the budget is balance and an “immediate moratorium” on all regulations since 2008 to examine their effects on jobs, as well as reduce spending in agencies such as the Department of Education, Department of Energy and Environmental Protection Agency — leaving more regulatory power to the states.
“The great issue facing this nation is whether we have the courage to confront spending and the vision to get our economy growing again,” Perry said. “We need a tax code that unleashes growth instead of preventing it, that promotes fairness, not class warfare, that sparks investment in America instead of overseas interests. It is time to create incentives for American companies to invest in American workers.”
Veteran flat tax advocate Steve Forbes, editor in chief of Forbes magazine, officially endorsed Perry’s plan Sunday, telling Fox News it is “win-win all around.”
While the Obama re-election campaign conceded the details are not yet out, they wasted no time slamming the Perry proposal Monday.
In a memo highlighted by the New York Times, Obama Campaign Policy Director James Kvaal argues that both Perry and former Massachusetts Gov. Mitt Romney’s tax proposals are “far right visions” that would “drive up the deficit,” and that “the most fortunate Americans would pay less while the middle class would pay a higher share.”
In response, the Perry campaign rejected the Obama campaign’s premise.
“Governor Perry’s plan will cut taxes for everyone and grow the economy, not pit Americans against each other like President Obama does,” Perry spokesman Mark Miner told TheDC.
After making his pitch, ABC News reports that Perry will meet with South Carolina Gov. Nikki Haley and conservative kingmaker Sen. Jim DeMint.
Perry’s full job proposal is available on his website.