Why would the 47% who are paying nothing under the current system and even get free money refunded to them ever let it go in favor of a 20% tax rate ? The Perry plan might exempt $50K for a family of four, but it won’t give them money back in EITC and other refundable tax credits. So they won’t switch to it.
The top 1% of income earners have an effective tax rate of 17%. They’ll stick with the current tax code.
Warren Buffet pays barely 10% now, so he and others like him will stick to the old tax code where their cap gains and dividends are taxed at 15% rather than Perry’s 20% and their muni bonds are tax free.
Of course these uber wealthy people’s estates will choose the Perry plan in the year they die so they can avoid the 55% estate taxes.
Making a tax plan “optional” is stupid. Enshrining government favoritism for people who choose to have a big mortgage debt rather than owning their home is moronic. Giving a family of four a $50K exemption before they even start to pay taxes is idiotic — they can vote for bigger government knowing it’ll never cost them a dime.
At least Cain is trying to think of alternatives to the current system, which is causing others to come up with some kind of plan too. You have to throw something in somewhere to begin discussions on a real overhaul of the system. Hasn’t ever been seriously touched on before.