Thoughts on Perry's Tax
I'll admit off the bat that I don't particularly like any of the Republican candidates, the Tea Party, or most of the Republican Party's agenda, which may I remind you is actually what got us into this mess (not Obama, who hasn't helped but also inherited $1 trillion in deficits and a terrible economy).
With that said, I do like Herman Cain and Rick Perry changing the conversation about taxes. Simple is good and the tax code has become rediculously complicated. Here are my thoughts good and bad.
I like the idea of a flat tax, I like the idea of no repatriation tax (which never made sense to me), I like the idea of no dividend or capital gains tax (which seems like double taxation after corporporate tax. Rick Perry, I like the idea.
The reality however is terrible. There is no way this increases revenue, which is what we need to do even though no one wants to admit it. It's also a very regressive tax and as such, low and middle income Americans would chose to stay on the old tax plan (which Perry allows).
A better idea would be to have a simple three phase tax rate. 0% on the first $10,000, 20% on everything else up to $1 million, and 30% on everything over $1 million. Under the TMFFlushDraw plan the ultra-rich would pay more than the capital gains rate they pay now, corporations would pay less and have more incentive to invest in the U.S., and people making $100,000 to $2 million who pay the highest rate would get a bit of a break.
Admittedly, I haven't run the numbers on how this affects each section of society or how much revenue it raises, but it seams more fair than Perry's plan.
I also like the simplicity of 9-9-9, but Cain's tax is more than regressive, it's evil. This plan helps the rich the most and hurts the poor the most. How does that make sense?
But again, a simple fix can be made. Keep the 9% sales tax, that seems fair. Keep the 9% corporate tax rate, that seems fair. But tier the 9% income tax rate a 0%-9%-15% at the levels of $10,000 and $1 million, like above. This would make it much less regressive.
Someone else do the dirty work
If you want to calculate the numbers, please do. My head hurts from listening to politicians and coming up with a better plan on a napkin.