Pronk Pops Show 51, October 26, 2011: Segment 0: Perry proposes optional flat 20 percent income tax and cap on government spending–Videos

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Pronk Pops Show 51:October 26, 2011

Pronk Pops Show 50:October 19, 2011

Pronk Pops Show 49:October 12, 2011

Pronk Pops Show 48:October 5, 2011

Pronk Pops Show 47:September 28, 2011

Pronk Pops Show 46:September 21, 2011

Pronk Pops Show 45:September 14, 2011

Pronk Pops Show 44:September 7, 2011

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Segment 0: Perry proposes optional flat 20 percent income tax and cap on government spending–Videos

Rick Perry ad: Cut, Balance and Grow

Rick Perry Announces His Plan to Cut, Balance & Grow

With 20% Flat-Tax Plan, Perry Eyes Distinction From GOP Field

Rick Perry CNBC

Perry wants flat tax… Almost

Political Checklist: Perry’s Flat Tax Plan and Obama’s Solo Plan

Steve Forbes Endorses Rick Perry and His Plan to Cut, Balance, and Grow

The FairTax Is Better Than Any Flat Tax!

What is the FairTax?

Why is the FairTax better than a flat income tax?

The FairTax: It’s Time

Perry’s Cornerstone Speech Highlights–Was he drunk, snorting cocaine or just Rick trying to be funny?

In Grey Court, South Carolina, on Oct.25, GOP presidential hopeful Rick Perry unveiled his plan for the U.S economy, “Cut, Balance and Grow.” The Texas governor’s proposed an optional flat income tax rate of 20 percent to replace the existing federal income tax system. Taxpayers would have the option to pay either the new flat 20 percent rate or continue paying income taxes based on the existing complex system.

Perry said, “It takes money from spendthrift bureaucrats and returns it to families. It puts fewer job-killing regulations on employers and more restrictions on politicians. It gives more freedom to Americans to control their own destiny. And just as importantly, the Cut, Balance and Grow plan paves the way for the job creation, balanced budgets and fiscal responsibility we need to get America working again.”

The individual standard tax exemption would be increased to $12,500, plus each dependent would also have a $12,500 tax exemption. A family of four earning $50,000 per year would be exempt from income taxes. Perry’s tax reform plan would also keep the mortgage interest, state taxes and charitable deductions for families earning less than $500,000.

Dividend, interest and capital gains taxes, the Alternative Minimum tax and estate taxes would all be eliminated. Social Security benefits would no longer be taxed.

Perry would not change Social Security and Medicare benefits for those currently receiving or soon-to-be receiving these benefits. However, Perry would gradually increase the eligibility age for Social Security and Medicare.

Young workers would be permitted to invest part of their Social Security payroll taxes in investment private accounts.

Americans eligible for Medicare would receive either a credit or payment to purchase a health insurance plan of their choice. Currently, the government pays benefits directly.

Companies doing business abroad would be encouraged to return their profits to the U.S. with a one-time reduced tax of 5.25 percent. With this tax incentive, more than $1 trillion in profits is estimated would be returned to the U.S. This would create several million new jobs as the profits are invested in the U.S. The corporate rate would be reduced from the second highest in the world at 35 percent to a more competitive 20 percent.

By design the Perry plan would deeply cut tax rates and in turn this may lead to lower tax revenues. In order to avoid large deficits, where government spending outlays exceed tax revenues, the federal budget would need to be massively cut, including discretionary spending and non-discretionary entitlement spending.

In terms of federal government spending, Perry’s plan theoretically would balance the budget in 2020, end all earmarks, reform entitlement spending for Social Security and Medicare, and limit government spending outlays to 18 percent of the Gross Domestic Product (GDP). Perry would propose to amend the Constitution to require balanced budgets.

Steve Forbes, who twice ran for the Republican presidential nomination on a proposed 17 percent flat tax, is Perry’s chief adviser for the optional flat tax plan.

Club for Growth president Chris Chocola said “Rick Perry’s plan for tax reform would be massively pro-growth.”

Perry’s plan is already being compared and contrasted with his two leading rivals for the nomination, Herman Cain and Mitt Romney. Cain’s 9-9-9 tax reform plan would scrap the existing income tax code and replace it and payroll taxes with a flat 9 percent business tax, a flat 9 percent individual tax and a 9 percent national sales consumption tax on the sale of new goods and services.

Cain’s plan is a hybrid of both flat income taxes and a consumption tax. The 9-9-9 plan was designed to be a bridge to the FairTax, which is a national sales tax that would replace all federal income, payroll, capital gains, Alternative Minimum Tax, gift and estate taxes.

Romney has proposed a plan that would cut the tax rates for corporations and personal savings and investment. Romney would eliminate taxes on dividend, interest and capital gains for individuals earning less than $200,000. In the past, Romney has favored a flat tax provided it did not hurt the middle class.

Perry’s tax reform plan is positioned between the bolder Cain plan and the more modest Romney plan. Ron Paul has yet to explicitly disclose his own tax reform plan. Paul has stated he would eliminate the Internal Revenue Service (IRS), permanently close five departments and cut spending by $1 trillion in the first year. This would seem to indicate he might support the FairTax with a lower rate, such as 20 percent or less-call it FairTax Less.

[Raymond Thomas Pronk is host of the Pronk Pops Show on KDUX web radio from 3-5 p.m. Wednesdays and author of the companion blog]

Background Articles and Videos

Rush Limbaugh Talks About Rick Perry’s Flat Tax Plan

Related Posts On Pronk Palisades

Progressive Republican Rick Perry’s Flat Tax Reform Distraction From More Illegal Immigration–Videos

Ron Paul’s Economic Plan for Restoring America to Peace and Prosperity–Videos

The FairTax (National Consumption Sales Tax) vs. The Flat Tax (One Rate Federal Income Tax)–Who Pays The Most Federal Individual Income Tax? Videos

Related Posts On Pronk Pops

Pronk Pops Show 51, October 26, 2011: Segment 1: A Ron Paul tax reform plan: no income taxes or IRS — FairTax Less!

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