On Tuesday I will announce my “Cut, Balance and Grow” plan to scrap the current tax code, lower and simplify tax rates, cut spending and balance the federal budget, reform entitlements, and grow jobs and economic opportunity.
The plan starts with giving Americans a choice between a new, flat tax rate of 20% or their current income tax rate. The new flat tax preserves mortgage interest, charitable and state and local tax exemptions for families earning less than $500,000 annually, and it increases the standard deduction to $12,500 for individuals and dependents.
The Republican candidates for President have all promised to simplify the tax code and make it more fair. Governor Rick Perry’s plan for a Flat tax will be revealed tomorrow (October 25) and it’s already being compared to Herman Cain’s “999” tax plan.
From what I’ve read about Governor Rick Perry’s flat tax plan (see the Wall Street Journal article, here, and Fox News article, here), the bureaucracies would be much simpler – that’s one reason they call it “flat:” a single tax bracket with a standard deduction per person would require very little in the way of new procedures at the IRS. If anything, it would decrease the personnel needed and there would be less need for “interpretation” of the tax code.
We certainly wouldn’t need more tax regulations, IRS employees or arbitrary decision making within the Treasury Department under Perry’s plan. The tax payers would have the option of using the old code or the new, flat bracket with a deduction off the top for each person in the family.
Currently, there’s a provision for a Newspeak-named “alternative minimum tax.” After a certain income level, people have to figure their taxes two ways, with and without certain deductions. They pay the greater amount.
There aren’t separate bureaucracies for those who pay the current regular tax and for those who pay the “alternative minimum tax.” The same crowd audits both.
On the other hand, Herman Cain’s 9-9-9 tax plan has already been tweaked, to make it more “fair.”
Mr. Cain says he has changed the 9% income tax (the middle “9” in that scheme) to the 9-0-9 with 0% income taxes for those that Washington deem “impoverished” and the brand new “empowerment zones” for favored cities and communities. In addition, the sales tax would require larger, newer bureaucracies, since there are currently no rules or regulations for monitoring or collecting a National sales tax, identifying who is paying it or who is not. That bureaucracy would have to be developed, along with reams of regulations made up from whole cloth.
In addition, the biggest flaw in Mr. Cain’s 9-?-9 tax plan in my opinion is that the very areas that are Democrat-controlled and and rife with corruption would be the places that Cain proposes to put “empowerment zones.” These “zones” nor the regulations to define or run them do not exist. How long ’till the corruption sets in? Who gets paid to develop more empowering empowering zones that favor the current powers that be? Who gets paid to look the other way when some are “empowered” more than others?
Edited for grammar – BBN 10/25/11, 4 AM