Perry’s economic plan would include a flat tax ...

A flat tax (short for flat rate tax) is a tax system with a constant marginal tax rate. Typically the term flat tax is applied in the context of an individual or corporate income that will be taxed at one marginal rate. Flat taxes in application often allow certain deductions and thus are a special case of a proportional tax.

October 25, 2011

Perry’s economic plan would slash taxes, federal spending on programs

GRAY COURT, S.C.-Texas governor and Republican presidential candidate Rick Perry has released an economic plan full of long-held conservative goals, including personal accounts for Social Security, an optional flat tax, major spending cuts and a series of tax cuts.

The plan would dramatically reduce taxes, particularly on wealthy Americans and corporations. It would reduce the corporate tax rate from 35 to 20 percent, eliminate taxes on dividends and many capital gains and essentially cap individual tax rates at 20 percent

Perry argues these tax cuts will spur economic growth by creating a more favorable environment for wealthy individuals and corporations to start or expand their businesses. But without significant spending reductions, the tax cuts could drastically increase the federal budget deficit.

“Taxes will be cut across all income groups in America, and the net benefit will be more money in Americans’ pockets with greater investment in the private economy,” Perry said to an audience of more than 200 inside the factory at ISO Poly Films, Inc. in this South Carolina town.

The “Cut, Balance and Grow” plan, which Perry first unveiled Tuesday in an op-ed in the Wall Street Journal, puts Perry firmly to the political right of former Massachusetts governor Mitt Romney in terms of economic policy.

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