Tuesday, October 25, 2011
Rick Perry's New Tax Plan
GOP Candidate Rick Perry has finally released an actual economic plan,and the policies he's endorsing are not terrible,at least the way they've been outlined so far.
It starts off with a 20% flat tax proposal that includes the key word voluntary,something you rarely hear. In other words, you would be able to have your accountant figure your taxes based onyour current rate and compare it to the flat tax rate of 20% and pick the one most advantageous to your situation.
It's unclear whether Perry's plan would continue to allow you to use itemized deductions if you picked figuring your taxes the old way over the 20% flat tax. If it does, fine, it's workable. If not, that's an error that will stifle a certain amount of economic activity.Either way, it's certainly something a lot better than Herman Cain's 9-9-9 Plan.
Perry's plan would continue to allow deductions for mortgage interest and charitable deductions for households earning less than $500,000 a year and would increase the standard deduction to $12,500.
Perry's plan calls for a 20 percent corporate tax rate,and calls for capping federal spending at 18 percent of the country's GDP - something I want a lot more details on.
It would be far preferable for me to hear a candidate make specific commitments on what he plans to cut rather than just throwing a figure out there.
Perry's proposal also calls for allowing younger workers the option of privatizing their Social Security accounts, something we also need a lot more concrete details on. Total privatization is likely counter productive and could lead to a situation like we had when the program was first adopted at the height of the depression - substantial numbers of destitute old people with no means of being self-supporting. But intelligent privatization that uses actuarial tables to determine a certain minimum amount as forced savings to prevent that but also allows discretionary invest of the rest is exactly what's needed.
After a number of gaffes and some horrible debate outings,Governor Perry is trying to play catch up and be seen as a serious candidate again. This is at least a step in the right direction.