The headline at Forbes.com says it all: “With a bold and pure flat tax, Ben Carson sets the standard for pro-growth reform.”
That’s the message Dr. Carson has been bringing to Republican voters from Des Moines to Dubuque and from Sioux City to Cedar Rapids as he criss-crosses the Hawkeye State ahead of the Feb. 1 Iowa caucuses. On Jan. 28 in Des Moines, the GOP presidential hopeful will make that same case for visionary, pro-growth tax reform at the final Republican debate before the caucuses.
Dr. Carson is calling for imposing a 14.9 percent flat tax rate on income, ending the double-taxation of capital gains and dividends and abolishing the charitable deduction and all tax credits. His flat tax would apply only to incomes above 150 percent of the poverty level, exempting the first $36,375 of income for a family of four.
All of his rivals for the GOP nomination want to lower tax rates, too, but Dr. Carson goes further, particularly in his willingness not only to touch, but to uproot, the untouchable “third rails” of the federal tax system, some of which have been in place for a century.
In addition to eliminating the charitable deduction and investment taxation, Dr. Carson would also repeal the estate tax, the mortgage-interest deduction, the state and local tax deduction, depreciation rules and the alternative minimum tax. All these reforms are designed to ensure people keep more of their own money and are integral to rebuilding our middle class.
His tax-reform plan is one of six comprehensive policy proposals the Carson campaign has put forth. The others are on education, foreign policy, government reform, health care and cyber-security. Dr. Carson is the only Republican candidate to release so many complete policy proposals that lay out a vision for healing our nation, and his tax plan is the best of the bunch among competing presidential candidates.
Unlike tax-reform proposals advanced by his Republican rivals, Dr. Carson’s tax plan doesn’t compromise with special interests on deductions or waffle on tax shelters and loopholes.
Take the charitable deduction, for example. However well-intentioned, it’s simply not necessary. If Americans are allowed to keep more of their own money through a lower tax rate, they can afford to be more generous in their donations to charity. The giving should originate in our hearts, not on the 1040 tax form.
Nor does the Carson plan falsely claim to be a flat tax while still deriving the bulk of its revenues through higher business flat taxes that amount to a European-style value-added tax (VAT). Adding a VAT on top of the income tax would not only impose an immense tax increase on the American people, but also become a burdensome drag on the U.S. economy.
Daniel J. Mitchell, a senior fellow at the libertarian Cato Institute and supply-side economist, writing at Forbes.com Jan. 5, gave the Carson tax-reform plan an “A-.”
Another prominent conservative economist, Steve Moore, concurred, noting that “[a] serious pro-growth tax plan would create millions of jobs and vastly simplify the federal IRS tax code.”
Carson’s reform plan “would help make America a tax haven,” says Moore, an economist at the Heritage Foundation and a former editorial board member of the Wall Street Journal, “and jobs would come to these shores, rather than get outsourced to our rivals.”
By contrast, for all the Democratic presidential candidates’ bluster, decrying corporations for offshoring manufacturing and jobs, it’s worth pointing out that none has put forth a plan like Dr. Carson’s for eliminating the disincentives in the U.S. tax code that foster that offshoring, much less a proposal that would incentivize the repatriation of those industries and jobs.
To the contrary, the Democrats vow to double down, proposing to penalize the offshoring — in essence, “treating” the symptoms, rather than the underlying disease.
Dr. Carson’s plan would require a token “de minimis” payment from all U.S. wage-earners, even those with the lowest incomes, because to borrow a line from President Obama, it’s important that every American has “skin in the game.” That’s because it’s easy to advocate tax increases on others when you’re not paying any yourself.
The retired pediatric neurosurgeon’s tax-reform plan has the added virtue of rekindling our nation’s founding ideals by eliminating the needless complexity of the federal tax code and treating every American, rich or poor, with or without lobbyists or lawyers, equal in their ability to achieve the American Dream.
The most desirable result of the Carson plan, however, would be the shredding of the monstrous, incomprehensible 70,000-plus-page IRS tax code. We urgently need to replace the current system — riddled as it is with countless tax loopholes, shelters and carve-outs — with one based on simplicity, transparency and fairness.
Perhaps under President Carson’s reformed tax system, April 15 will no longer be regarded with such fear and loathing by the American people.
John Philip Sousa IV is chairman of The 2016 Committee, a political action committee supporting Ben Carson’s campaign for the Republican presidential nomination.