I’m liking Rand Paul’s tax plan. Excerpt:
As he (Sen. Paul) said when he unveiled the plan on video, this is the boldest rewrite of the income tax system in 100 years. Even Ronald Reagan — who dramatically improved the federal tax system — didn’t perform such a sweeping cleanup of the tax code.
For full disclosure, I spent the last several months helping design this plan with Sen. Paul — so I’m biased. But there is no doubt that this plan, which reduces income tax rates from as high as 40% and business taxes from 35% down to a flat 14.5%, can only be described as explosively pro-growth and pro-jobs.
The 14.5% tax would apply to wages, salaries, capital gains, rents and dividend income. It eliminates the estate tax, telephone taxes, Internet taxes, gift taxes and all customs and duties.
This plan would take America from being one of the nations with the highest income tax rates in the world to having one of the lowest. It would suck capital and jobs from the rest of the world almost immediately to these shores.
This is the best bit:
For low-income and middle-class families of four, the first $50,000 of income would be tax-free. Moreover, because this plan eliminates the payroll tax withheld from worker paychecks, the average worker with a $40,000 income would get a $3,000 raise in take-home pay. At a time of falling wages, that would be a big boost to middle-class financial security.
Perhaps the strongest case for the Fair and Flat tax is that it eliminates all of the special interest loopholes and carve-outs in the tax code.
Tax lobbyists in Washington would become an endangered species — and it couldn’t happen to a nicer group of people. The richest 1% get the preponderance of the tax write-offs, so getting rid of the big deductions would increase their taxable income while lowering the rate.
This isn’t quite as good as the FairTax, but it will do. The best part is the elimination of withholding; every taxpayer should be required to write a check to the IRS, every quarter, like us self-employed folks have been doing for years. That will have most people a lot more concerned with what the Imperial Federal government is doing with their money, when they actually see it going to Washington; the current withholding system (purposely) makes it too painless.
That’s not all Senator Paul would attempt to do if elected (Congress still has some say in these things.) He would also like to eliminate, for one thing, the Department of Education – a good idea, as there’s no good reason or Constitutional justification for Imperial involvement in education.
To be honest, we could get rid of Commerce, Energy, the EPA and plenty of other dead weight in the Imperial City as well, but those plans may come out farther down the campaign trail. To be honest, it’s wildly unlikely any of this will actually happen, but it would go a long way towards slowing the Imperial Federal government’s fiscal disintegration.
Back to the tax plan: The other big advantage of a plan like this would be undoing at least part of our nation’s insane obsession with punishing success, in two ways: First, we have the highest tax rates on corporate profits in the world, and second, our tax code is so insane that nobody – not the IRS, not tax accountants, not tax attorneys, nobody – understands it. Senator Paul’s plan would go a long ways towards addressing that as well.
Senator Paul has had some trouble getting any traction in this pre-pre-pre-campaign season, but this plan may get him some movement in the polls. We’ll see.