Rand Joins Tax Debate With Flat-Rate Proposal
Kentucky senator Rand Paul has introduced a tax reform proposal that promises to "blow up the tax code" and replace it with a flat tax on individual and business income. Here's Paul introducing his proposal in the Wall Street Journal:
Some of my fellow Republican candidates for the presidency have proposed plans to fix the tax system. These proposals are a step in the right direction, but the tax code has grown so corrupt, complicated, intrusive and antigrowth that I've concluded the system isn't fixable.
So on Thursday I am announcing an over $2 trillion tax cut that would repeal the entire IRS tax code—more than 70,000 pages—and replace it with a low, broad-based tax of 14.5% on individuals and businesses. I would eliminate nearly every special-interest loophole. The plan also eliminates the payroll tax on workers and several federal taxes outright, including gift and estate taxes, telephone taxes, and all duties and tariffs. I call this "The Fair and Flat Tax."
In addition to the flat rate on all income, Paul's plan would remove all deductions from the code except those for mortgage interest and charitable donations. "The first $50,000 of income for a family of four would not be taxed," he writes. "For low-income working families, the plan would retain the earned-income tax credit."
Paul says he developed the plan with the helps of Stephen Moore of the Heritage Foundation, flat-tax advocate Steve Forbes, and economist Art Laffer. He also says the Tax Foundation estimated the plan would add 1.4 million jobs and 10 percent to GDP over ten years.