In an op-ed published by The Wall Street Journal, Sen. Rand Paul, a Republican presidential candidate for 2016, proposed a 14.5 percent flat tax to personal income and businesses that would make “the economy roar.”
Paul’s “Fair and Flat Tax” plan is in response to what he calls the “incomprehensible” Goliath that has become the IRS. He notes that in a nine-year period, “an average of one ‘fix’ a day” has been made to IRS tax codes.
The 14.5 percent tax would be applied to wages, salaries, dividends, capital gains, rents and interests of individuals. It would also eliminate deductions, save for mortgage and charities. Furthermore, a family of four’s first $50,000 of income will not be taxed, according to the plan.
The 14.5 percent tax would also apply to all business transactions across all companies, eliminating the almost 40 percent tax placed on small business and the 35 percent tax on larger corporations.
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With his tax plan, Paul plans to “blow up the tax code and start over.”
In the op-ed, Paul outlines balanced budget plans that address the potentially worrisome “massive hole in the budget deficit,” calling his tax plan “an economic steroid injection.”
“Because the Fair and Flat Tax rewards work, saving, investment and small business creation, the Tax Foundation estimates that in 10 years it will increase gross domestic product by about 10 percent, and create at least 1.4 million new jobs.”
“My plan would actually reduce the national debt by trillions of dollars over time when combined with my package of spending cuts,” he claimed.
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Paul’s tax plan is by far one of the most thorough and comprehensive, according to Bloomberg.
Yahoo Finance Columnist Rick Newman also weighed in on the plan: “It sounds like a great idea, it’s irresistible — blow up the tax code,” he told Yahoo.
Jeremy Hill, managing partner at Old Blackheath, also told Yahoo News that changing tax codes requires a more wholesome evaluation, as $2 trillion is still being removed from the government.
“Where are we going to stop spending,” Hill said. “It’s not a fulsome proposal until you detail the other side of the balance sheet.”