(Republicans are great at trickle down economics, but little else. A flat tax on the poor and the middle class would wipe out what’s left of our economy, but strengthen the hold the rich and powerful have on our government.
Job creation? Fixing this economy? The GOP have no interest in such things. Just corporate power and greed. And more money to line their already deep pockets with.)
Republican Perry proposes flat tax, corporate tax cut
GREENVILLE, South Carolina (Reuters) – Republican Rick Perry outlined a broad economic proposal on Monday to let Americans pay a flat 20 percent income tax rate and allow corporations to bring profits home from abroad at a discount.
The Texas governor is to lay out the “cut, balance and grow” plan on Tuesday in a speech in a Greenville suburb, part of an effort to recapture the imagination of conservatives still looking for an alternative to Republican front-runner Mitt Romney to challenge President Barack Obama in next year’s presidential election.
Perry laid out his plan in a Wall Street Journal opinion article. The aim is to generate the economic growth to create jobs and reduce America’s 9.1 percent unemployment rate. That is the key issue in the 2012 campaign and the reason why Democrat Obama is considered beatable.
Perry would give Americans a choice: pay a 20 percent flat tax or keep their current rate. To blunt criticism that a flat tax would cut taxes on the wealthy and increase them on the middle-class, he offered some sweeteners.
His proposal would preserve popular tax deductions for home mortgage interest, charitable donations and state and local tax exemptions for families earning less than $500,000 a year.
Perry is proposing the plan after consultations with Steve Forbes, the Republican who offered a flat tax plan in 1996 when he ran a losing race for the party’s presidential nomination. Forbes endorsed Perry on Monday.
Perry would lower the corporate tax rate to 20 percent from 35 percent. He would give corporations with a total in profits of $1.4 trillion overseas to pay a discounted tax rate of 5.25 percent temporarily to encourage swift repatriation of the money.
Companies have been lobbying Congress hard for legislation to create a repatriation “tax holiday.” Its fate may have been hurt by recent studies finding that an earlier tax holiday failed to create new U.S. jobs, as had been promised.
Perry said he would move the United States to a “‘territorial tax system” — as in Hong Kong and France, for example — that only taxes in-country income.'”
Perry, whose campaign has been sagging after several shaky debate performances, is laying out his plan in South Carolina, a key state for any conservative seeking the White House.
He said he would eliminate the tax on qualified dividends and long-term capital gains to “free up the billions of dollars Americans are sitting on to avoid taxes on the gain.”
To help older Americans, he would eliminate a tax on Social Security retirement benefits and help those who see their benefits taxed if they continue to work and earn income in addition to Social Security earnings.
Perry said he would also establish a goal of balancing the federal budget by 2020 but admitted it would be hard given the tax cuts he says are needed to re-energize economic growth.
“It will be an extremely difficult task exacerbated by the current economic crisis and our need for significant tax cuts to spur growth. But that growth is what will get us to balance, if we are willing to make the hard decisions of cutting,” he said.
Perry said U.S. government spending is out of control and he would start moving toward fiscal responsibility by capping federal spending at 18 percent of U.S. gross domestic product, banning future bailouts and passing a balanced budget amendment to the U.S. Constitution.