The Rick Perry Tax Plan

Rick Perry has been viewed by many Republicans as the best candidate for the job as president. In fact, he was once the front runner in the Republican primaries. As each debate passes, he falls farther behind in the polls. However, the Republican primaries are far from over, and it is never too late for things to turn around for this candidate. So, it is important to take a look at what his ideal tax plan would be for America.

What does Rick Perry want?

Perry wants to create a hybrid of a flat tax plan and our current tax structure. In his tax plan, taxpayers would make a choice between using one or the other. He wants to completely eliminate taxes on investment income. He would also allow deductions for mortgage interest, charitable contributions, and state and local taxes on the flat tax plan.

The flat tax plan would tax all who selected it 20% of their personal and corporate taxes. For those who make over $1 million annually, this would be a tremendous $510,000 tax break. For those who make between $40-50 thousand annually this flat tax plan would slightly raise taxes. Those making less would definitely expect a dramatic increase in taxes.

Experts believe that any wealthy citizen in his right mind would choose the flat tax plan over what our current system is taxing them. For the rest of America, there would be no benefit at all to the tax plan. Tax season would simply be business as usual for them.

Will Perry’s tax plan hold up?

Perry’s tax plan would bring a revenue shortfall in 2015 of nearly $1 trillion. The current Bush-era tax breaks would only cost America $570 billion. So, America’s deficit could potentially double, unless the government dramatically cut back on Federal programs. This is why Perry wants to cut Federal spending to 18% of GDP, which is $15 trillion. This would drop spending from $3.6 trillion to $2.7 trillion a year.

Just what does Rick Perry want to cut in his tax plan? Well, he’s become rather infamous for not being able to remember three item list of major Federal agencies (the last one he actually wanted to cut was the Department of Energy, not the EPA). So, at best, Perry’s tax plan seems like an enthusiastic yet poorly thought out project. It relies on the fickle and unproven Trickle Down Theory to create jobs and economic growth, while doubling the rate America’s debt grows.