Republican presidental candidate Rand Paul revealed his tax plan on Thursday, a 14.5% across the board flat tax that would “blow up” the over 70,000 pages of IRS tax code, while allowing Americans to complete their annual tax returns on one simple page.
Paul asserts that his plan would be fair for all, would end corporate welfare, and would “eliminate the army of lobbyists and tax lawyers gaming the system.”
“I’m running for president to defeat the Washington machine. And to do that, we have to drive a stake through the heart of the IRS and our terrible tax code,” Paul said in his announcement. “We need to tear it up and start over with a plan that’s simple, fair, and cuts taxes for every single American.”
Paul’s plan would also eliminate the FICA tax rate of 6.2% which Americans pay on top of their federal income tax rate on the first $118,500 of wage earnings. Paul refers to the FICA tax as “the worker’s tax.”
“The first thing we’ll do is eliminate the worker’s tax. That’s right, it’s gone — zero — nothing. That means every single working American will keep thousands of dollars more in their paycheck each year,” he announced.
“All special tax breaks would be gone in exchange for one low, flat rate of 14.5% that every single business will pay. No more billion dollar corporations paying zero. But also, no mom and pop businesses paying 40%.”
In an op-ed in the Wall Street Journal Wednesday evening, Paul explained that the current “tax code has grown so corrupt, complicated, intrusive and antigrowth that I’ve concluded the system isn’t fixable.”
Senator Paul’s plan is called “The Fair and Flat Tax,” not to be confused with the FAIR tax, a program which would eliminate all income, payroll, estate, social security, medicare, capital gains, replacing those with a flat national sales tax.
For all the class warfare progressive Marxists out there, Senator Paul’s plan would eliminate taxes on the first $50,000 of income for a family of four. The 14.5% flat-tax rate would be applied equally to all personal income as well as dividends, capital gains, interest and rental income. Gift and estate (death) taxes, would also be eliminated under the proposal.
Senator Paul’s plan also gets rid of all deductions, with the exception both the mortgage interest and charity deductions.
“My tax plan would blow up the tax code and start over,” Paul wrote. “President Obama talks about ‘middle-class economics,’ but his redistribution policies have led to rising income inequality and negative income gains for families,” he proclaimed.
Paul points out that many jobs have been sent overseas because of the U.S. having the highest corporate income tax in the world (35%), while some companies are completely moving to countries with more favorable tax environments.
The proposal, says Sen. Paul, would reduce the government’s take by $2 trillion over ten years, so offsetting spending cuts would have to be applied in order to keep the deficit from growing.
“The Tax Foundation studies show my plan will create nearly 2 million jobs,” Paul said in his video statement.
Paul discloses that in constructing his plan, he was consulted by the Heritage Foundation’s Stephen Moore, as well as former presidential candidate Steve Forbes and famous economist from the Reagan administration who invented the “Laffer Curve,” Art Laffer.
In summarizing his tax proposal, Senator Paul said:
“My plan would cut taxes for everyone; it will end corporate welfare and special tax breaks. It will create jobs; it will get the IRS out of your life. It’s the first part of my plan to defeat the Washington machine. This will shake up Washington and Wall Street — no doubt. But I’m not running for their approval; I’m running to take our government back.”