Tuesday, October 25, 2011

Perry's flat tax a big break for the well-to-do

With great dramatic flair, Gov. Rick Perry pointed to a pallet stacked high with reams of paper. That gesture was intended to display the sheer bulk of the 72,000 pages of material in the U.S. Tax Code, he said, standing on the factory floor of a plastics manufacturing firm in South Carolina.

Then he withdrew a postcard from the inner lapel pocket of his suit and said you could fit his new flat tax and job growth plan on a piece of paper of that size.

Closer inspection shows it's a humdinger for the rich and the corporate community, a bummer for the wage earners, and photo op for the media.

But wait, there's more. Mr. Perry will appear later today at the South Carolina state capitol to announce the endorsement of the Speaker of the House.

The flat tax plan is an either/or proposition for wage earners. They could choose between a 20% flat income tax with a $12,500 deduction, no inheritance tax and no capital gains tax, or they could opt to stick with the present tax code.

Corporations would get a lowered income tax rate of 20% and an immediate cut rate of 5.25% if they choose to repatriate their operations to American soil, a transition to a territorial tax system that taxes only in-country income, and a promise to repeal the Affordable Care Act, Dodd-Frank and Section 404 of Sarbanes-Oxley. He also promises a balanced budget amendment to the Constitution and capping federal spending at 18% of gross domestic product.

Wage earners would get an elimination of income tax on Social Security benefits and an opportunity to manage a personal Social Security account.

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