Skip to comments.Perry Commits to Flat Tax, Reforming Entitlements
Posted on 10/19/2011 11:05:30 AM PDT by Cincinatus' Wife
Las Vegas - In a brief speech this morning at the Western Republican Conference, Texas governor Rick Perry announced that in six days he would reveal an economic pro-growth package that will create growth and encourage investment in America. The plan will involve major tax reform, entitlement reform, a balanced budget amendment to the Constitution, an abolishment of earmarks, and a recommitment to energy exploration in the United States.
Our long term growth requires a fundamental tax reform, Perry said. Therefore, his plan starts with scrapping the three million words of the current tax codestarting over with something simple: a flat tax.
I want to make the tax code so simple that even Timothy Geithner can file his taxes on time, the Texas governor said, taking a jab at the treasury secretary who had major errors in his tax returns that were revealed after he was nominated by President Barack Obama for his present job.
The second part of my plan involves the serious commitment to spending, realizing alternatives to the path taken by Europe, Perry said. In this vein, the Texas governor went on to affirm his commitment to reforming entitlements, preserving those commitments to those who are on Social Security and those approaching the age of retirement.
Perry did not give further details on what the new flat tax rate would be (or how it might work) or on how he would reform entitlements.
On the balanced budget amendment, Perry committed to campaigning in all fifty states, if necessary, in order to get the provision added to the Constitution.
And he promised to end earmarks: My plan is to end earmarks for good.
In revealing tidbits of his economic plan, Perry played up his anti-establishment credentials.
I’ll wager that if Perry gains the WH, he will resurrect the NAFTA Superhighway.
Do you live in Texas?
Why do you ask? Do I need to live in Texas to express my opinions on FR?
I like the sound of this. Now the discussion over tax reform will get even more attention.
I'm not sure if that is a good compliment or supposed to be an insult... one never knows during a primary season, lol, but his campaign does seem to be organized and methodical.
Alan West is truly awesome!
I so agree with that.
Love that guy.
It will fade. The law will be reversed by the states that have implemented it when the border is secure the the flow of illegals are subdued or stopped.
The law is a result simply because the Federal Government and Supreme Court made laws or did not enforce laws that they should have.
The root problem is securing the border.
Then they can reverse the anchor baby law.
Then they can reverse the in-state tuition laws or it will just become irreverent due to no more illegals flowing into the country.
Also the mandated education of illegals law will do the same; become irreverent.
Rick Perry stands head & shoulders above all other candidates. No gimmicks, no falsehoods. Just an honest American with a smart and effective plan for returning this country to its former prominence.
People tend to forget that Perry has been in for just over 2 months' time. The others been in for far longer.
Super Tuesday is still a long way off, and the nomination may be fought all the way to the convention.
They have to pay the tuition. (In Texas)
Keep in mind that the 12-16K who qualify under the in-state tuition law are undocumented and documented immigrants.
The approx. amount paid by the above runs $ 30 million/year.
That is what they PAY.
Now some do get approved for aid. The amount of aid for the above mentioned 12-16K students is between
$ 10million and $ 20 million/year.
So Texas Universities come out ahead approx.
$ 10 million to $ 20 million per year.
And also, everyone in Texas including illegals pay taxes because we have a sales tax here but no income tax.
So, everyone in Texas pays taxes when they purchase most anything except food and Bibles. Legal, illegal, immigrant, Texas natives, Texas move-in or anyone visiting from anywhere.
I am not sure why we are having trouble with this concept. The "illegal" part has NOTHING to do with "residency". If you have been a resident of Texas (and thus paying Texas Sales Tax and Texas Property Tax) for the past three (3) years, you receive in-state tuition ... regardless of what the people in D.C. reflect in your immigration file. Period.
Any "non-Texans" who choose to move here for 3 years can also qualify for in-state tuition.
How does this happen exactly? Please explain.
Is Cain suggesting that all of America is now an 'economic development zone', or does that just apply to inner-city ghettos?
Personally, I think you are being a little optimistic in your economic assessment.
Sorry, I am not going to fall for the "only McCain can defeat Obama" mantra.
That was so 2008.
By moving some of tax that we now collect from a corporate income tax and instead collecting that in the form of a tax on the sale of goods, it shifts the tax burden from only domestic businesses to be shared by both domestic and foreign businesses.
Let's say for purposes of example that today the government raises $20 from corporate income tax on domestic television manufacturers (and pretending for purposes of example that we still make those products).
And now let's shift half of the burden onto a sales tax on the sale of the televisions themselves to consumers.
In the new scenario, the government only collects $10 from the corporate income tax from the US manufacturer instead of $20 as before. This means the US manufacturer has more flexibility to lower its prices and still make a profit.
Assuming the domestic manufacturer sells one television and the foreign manufacturer sells one television, the $10 that was shifted over onto the sales tax is charged $5 on the television sold by the domestic manufacturer and $5 on the television sold by the foreign manufacturer.
The consumer is only concerned with the after-tax price. The foreign manufacturer today has a number of advantages in labor, environmental, currency manipulation, and so forth.
The Cain tax plan helps to level the field by allowing a US manufacturer to be able to compete at lower prices and placing a tax burden at the point of sale on goods by both domestic and foreign manufacturing.
Who knows, under this plan we might even see television manufacturing begin again in the US if we combine the tax plan together with lifting regulatory burdens.
A flat tax is the first intelligent thing to come out of Perry in a decade.
There would need to be many scenarios run to validate your assumptions on this.
In lowering the domestic, corporate income tax from 39% to 9%, we would also be eliminating corporate tax deductions such as depreciation, labor, benefits, etc. Indeed Cain touts his plan as ‘revenue-neutral’, and I do not see a significant shift between domestic corporate costs and foreign corporate costs.
Companies choose to locate plants in various places for many reasons. Why else would so-called ‘foreign-car’ makers such as Toyota, Honda, and Nissan have so many plants here in the USA?
It’s a compliment. This is big-boy ball, planned out like a musical score.
There is no question that for a capital-intensive business like manufacturing there would be a benefit from the Cain plan. (The Cain plan does NOT eliminate deductions for cost of capital investments (depreciation) but it does eliminate deductions for labor costs.)
“I do not see a significant shift between domestic corporate costs and foreign corporate costs”
In my example of the $20 in tax, there was a shift of $5 of tax onto the goods sold by the foreign corporation.
In principle, in the aggregate under the Cain plan, ALL OF THE SALES TAX collected on goods sold by foreign manufacturers is a shift of tax onto the foreign businesses, since consumers are making decisions based on after-tax prices.
Of course there is a matrix of factors businesses consider in deciding where to manufacture. But OBVIOUSLY it helps to give them more of an economic advantage to doing so domestically under the Cain plan.