Gov. Perry's flat tax plan

Gov. Perry's flat tax plan

October 26th, 2011 in Opinion Free Press

How would you like to get rid of the federal tax code and replace it with a simpler system?

That would be great! Think of the savings in tax compliance costs alone: The Tax Foundation predicts that within four years, the American people will be spending almost half a trillion dollars in the often nearly impossible attempt to understand and comply with the tax code.

What if a simpler code were adopted that would eliminate the bulk of those costs for many Americans, allowing that money to be used more productively in our economy?

Texas Gov. Rick Perry -- one of the Republicans seeking the GOP nomination to challenge President Barack Obama -- has proposed a flat tax option that he says would "lower and simplify tax rates, cut spending and balance the federal budget, reform entitlements, and grow jobs and economic opportunity."

He would give you the choice between your existing graduated income tax rate and a flat tax of 20 percent.

His proposal would maintain some tax exemptions for families earning less than half a million dollars a year, and it would increase the standard deduction to $12,500 for individuals.

He would also eliminate taxes on Social Security benefits. He would maintain current Social Security benefits for retirees, but he would give younger workers the option to place their income in private accounts.

Perry also wants a balanced budget amendment to the Constitution, and he seeks to limit federal spending to 18 percent of gross domestic product.

He aims to balance the budget by 2020.

Could his plan work? That's hard to know at this point.

But we should find out much sooner whether it generates enough public interest to propel Perry back into the upper tier of GOP candidates.