Flat-Tax Plans: All Are Good, None Are Perfect
Here’s a no-good-deed-goes unpunished story.
Rand Paul has proposed a $2 trillion tax cut over years — arguably the biggest tax reduction in American history. He wants to shave tax rates down to 14.5 percent, the lowest rate since the income tax was introduced a century ago. Ted Cruz has proposed a tax cut nearly as large; his rate is 16 percent. This compares with tax rates that are as high as 42 percent under the current tax code.
Both plans would eliminate the corporate income tax AND the payroll tax. They would also eliminate almost all loopholes in the tax system.
The Tax Foundation estimates that the plans would add about 12 percent to GDP within a decade, which amounts to an extra $2.5 trillion over that period — like adding another California to the economy.
This could be the biggest takedown of our $4 trillion colossal government and Washington, D.C.’s micro-control of the economy in decades. K Street’s million-dollar lobbyists would be all but shut down. If you’re a free-marketeer, it sounds like a dream come true, right?