Rand's WSJ Op-Ed: Blow Up the Tax Code and Start Over

[EBounding]

Blow Up the Tax Code and Start Over (http://www.wsj.com/articles/blow-up-the-tax-code-and-start-over-1434582592)
Apply a 14.5% flat tax to personal income and to businesses. Cut deductions. Watch the economy roar.


Some of my fellow Republican candidates for the presidency have proposed plans to fix the tax system. These proposals are a step in the right direction, but the tax code has grown so corrupt, complicated, intrusive and antigrowth that I’ve concluded the system isn’t fixable.

So on Thursday I am announcing an over $2 trillion tax cut that would repeal the entire IRS tax code—more than 70,000 pages—and replace it with a low, broad-based tax of 14.5% on individuals and businesses. I would eliminate nearly every special-interest loophole. The plan also eliminates the payroll tax on workers and several federal taxes outright, including gift and estate taxes, telephone taxes, and all duties and tariffs. I call this “The Fair and Flat Tax.”

President Obama talks about “middle-class economics,” but his redistribution policies have led to rising income inequality and negative income gains for families. Here’s what I propose for the middle class: The Fair and Flat Tax eliminates payroll taxes, which are seized by the IRS from a worker’s paychecks before a family ever sees the money. This will boost the incentive for employers to hire more workers, and raise after-tax income by at least 15% over 10 years.

Here’s why we have to start over with the tax code. From 2001 until 2010, there were at least 4,430 changes to tax laws—an average of one “fix” a day—always promising more fairness, more simplicity or more growth stimulants. And every year the Internal Revenue Code grows absurdly more incomprehensible, as if it were designed as a jobs program for accountants, IRS agents and tax attorneys.

Polls show that “fairness” is a top goal for Americans in our tax system. I envision a traditionally All-American solution: Everyone plays by the same rules. This means no one of privilege, wealth or with an arsenal of lobbyists can game the system to pay a lower rate than working Americans.

Most important, a smart tax system must turbocharge the economy and pull America out of the slow-growth rut of the past decade. We are already at least $2 trillion behind where we should be with a normal recovery; the growth gap widens every month. Even Mr. Obama’s economic advisers tell him that the U.S. corporate tax code, which has the highest rates in the world (35%), is an economic drag. When an iconic American company like Burger King wants to renounce its citizenship for Canada because that country’s tax rates are so much lower, there’s a fundamental problem.

Another increasingly obvious danger of our current tax code is the empowerment of a rogue agency, the IRS, to examine the most private financial and lifestyle information of every American citizen. We now know that the IRS, through political hacks like former IRS official Lois Lerner, routinely abused its auditing power to build an enemies list and harass anyone who might be adversarial to President Obama’s policies. A convoluted tax code enables these corrupt tactics.

My tax plan would blow up the tax code and start over. In consultation with some of the top tax experts in the country, including the Heritage Foundation’s Stephen Moore, former presidential candidate Steve Forbes and Reagan economist Arthur Laffer, I devised a 21st-century tax code that would establish a 14.5% flat-rate tax applied equally to all personal income, including wages, salaries, dividends, capital gains, rents and interest. All deductions except for a mortgage and charities would be eliminated. The first $50,000 of income for a family of four would not be taxed. For low-income working families, the plan would retain the earned-income tax credit.

I would also apply this uniform 14.5% business-activity tax on all companies—down from as high as nearly 40% for small businesses and 35% for corporations. This tax would be levied on revenues minus allowable expenses, such as the purchase of parts, computers and office equipment. All capital purchases would be immediately expensed, ending complicated depreciation schedules.

The immediate question everyone asks is: Won’t this 14.5% tax plan blow a massive hole in the budget deficit? As a senator, I have proposed balanced budgets and I pledge to balance the budget as president.

Here’s why this plan would balance the budget: We asked the experts at the nonpartisan Tax Foundation to estimate what this plan would mean for jobs, and whether we are raising enough money to fund the government. The analysis is positive news: The plan is 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%, and create at least 1.4 million new jobs.

And because the best way to balance the budget and pay down government debt is to put Americans back to work, my plan would actually reduce the national debt by trillions of dollars over time when combined with my package of spending cuts.

The left will argue that the plan is a tax cut for the wealthy. But most of the loopholes in the tax code were designed by the rich and politically connected. Though the rich will pay a lower rate along with everyone else, they won’t have special provisions to avoid paying lower than 14.5%.

The challenge to this plan will be to overcome special-interest groups in Washington who will muster all of their political muscle to save corporate welfare. That’s what happened to my friend Steve Forbes when he ran for president in 1996 on the idea of the flat tax. Though the flat tax was surprisingly popular with voters for its simplicity and its capacity to boost the economy, crony capitalists and lobbyists exploded his noble crusade.

Today, the American people see the rot in the system that is degrading our economy day after day and want it to end. That is exactly what the Fair and Flat Tax will do through a plan that’s the boldest restoration of fairness to American taxpayers in over a century.

[CaptUSA]

Rand is going full-on populist. And I like it.

[Sola_Fide]

Step in the right direction.

[CaptUSA]

Bold plan that should garner some attention to keep his name in the headlines. If the media gets the other candidates to comment on it, all the better.

Also, name-drops Steve Forbes, Art Laffer, and Stephen Moore. Big plus for primary voters.

Steers the conversation back into his wheelhouse with conservative voters - the economy and taxes.

Finally, puts him at odds with special interests.

Nice move, Rand. Well-played. Here's hoping they take the bait.

[Crashland]

There's zero chance of such a drastically bold tax reform happening, but he IS right, and it IS popular to rail against the current tax code, so this is a good move. It's good to remind people that he isn't limited to social issues and foreign policy

[The Northbreather]

I wonder if a lower tax rate is worth the trade off for a biz that getting that good corporate welfare?

Im guessing not, at least for the ones who can afford lobbyists in Washington.

[euphemia]

I have always liked the idea of a flat tax. Always. I would take out all loopholes if the first $50K were exempt.

And since Obamacare was ruled a tax, then it needs to be part of that 14.5%. If taxes paid are more than the taxable income, the BAM! There's your subsidy. Case closed.

[dude58677]

Will he pardon Irwin Schiff and others for income taxes if he can't get this passed?

"There is no law requiring anyone to pay income taxes." Irwin Schiff

[Danke]

Will he pardon Irwin Schiff and others for income taxes if he can't get this passed?

"There is no law requiring anyone to pay income taxes." Irwin Schiff

Well there is a law, just anyone in the private sector is not part of it, it is only for federally connected income.

[presence]

as if it were designed as a jobs program for accountants, IRS agents and tax attorneys.

as if?

[phill4paul]

I fail to see the point in arguing with a thief which way he will take my earnings.

[economics102]

All capital purchases would be immediately expensed, ending complicated depreciation schedules.

This could be the headline all by itself. This would be a major incentive for businesses to re-invest earnings, and would be a huge boon for new businesses trying to get off the ground.

[Occam's Banana]

blow up the tax code

Hooray!! Huzzah!! Hooray!!


and start over

Boo!! Hiss!! Boo!!

[RabbitMan]

This could be the headline all by itself. This would be a major incentive for businesses to re-invest earnings, and would be a huge boon for new businesses trying to get off the ground.

As a new small business owner who for the first time got to bleed out my ass for my business's annual taxes....I agree this would be pretty awesome.

[anaconda]

Seems to me that a flat tax still empowers the tax collectors to make you grovel about what your "taxable income" is, which seems like the major premise for 99% of IRS abuse. Fair tax is the only solution.

[anaconda]

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[anaconda]

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[anaconda]

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[anaconda]

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[anaconda]

Why does the RPF's occasionally freeze up and then save multiple duplicate posts?

[Ronin Truth]

Blow up the tax code and burn the surviving pieces.

[jeffro97]

I made a little summary graphic if anyone wants something to share. Has some of the key things from the plan.

https://41.media.tumblr.com/143a9d3ff9b4565d9c9b3c6b1408dada/tumblr_nq4kk8DJui1u62ztuo1_540.png

As for the plan itself, I think it's a good way to go. Personally, I'd like to see 0%, but I know that won't be happening anytime soon. I read it all over last night. Sounds pretty good to me. I can support it.

[euphemia]

I think this is such an awesome plan. The one thing I think would make it perfect, would be if it is codified that any proposed future increases must be introduced for the people to vote up or down.

[georgiaboy]

love this!

Simple, balanced, fair, and stimulating.

[LatinsforPaul]

611496113330241536

[EBounding]

Rand should also propose removing all withholding requirements and make the tax bill due the day before election day.

[Barrex]

Watch 2 videos:

https://www.youtube.com/watch?v=MnDd_M7R6eE

https://www.youtube.com/watch?v=dQw4w9WgXcQ

[angelatc]

I think the EITC needs to go.

[presence]

Watch 2 videos:
https://www.youtube.com/watch?v=MnDd_M7R6eE

https://www.youtube.com/watch?v=dQw4w9WgXcQ




OMG SECOND ONE IS AWESOME


RAND 2016 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

[presence]

I think the EITC needs to go.

Does rand address this? He said in January that it was 25% fraud

[LibertyExtremist]

I would prefer blow up the tax code and then stop there. Hey, I can dream right? :D

[fisharmor]

Where can I find out more about this plan? Is there any more?
Does anyone else realize that a "simple" 14.5% here is anything but simple?

The first video posted by Barrex specifically mentions eliminating employee-paid FICA taxes. That's not in the text.
Can I assume that the 14.5% will be the only deduction on my paycheck?
Does it follow then that he's proposing we also eliminate medicare/medicaid payroll deductions, and roll that into the one rate?

If the first $50k is not taxed, does that mean I get a GIGANTIC refund in April now, since I have a mortgage and give charitably?
In order not to tax the first $50k they're either
1) going to not withhold for the first part of the year, meaning that after I hit $50k I will start having withholdings, which I am totally not cool with, or
2) they're going to have to charge 14.5% all year, and if I have (for example) a $60k salary they'll have to withhold $8700. But 14.5% of the taxable revenue is only $1450, so they'll have to refund me a whopping $7250, which they've drawn interest on all year instead of me doing it.

Except.... this is not qualified.

deductions except for a mortgage

Mortgage.... what? Mortgage payments, or mortgage interest?
If it's mortgage payment, I mean, holy shit, I could make $90k in one year, I could totally live off of $50k, and then I'd be putting $40k per year into mortgage payments!
If it's just interest, then that's a whole lot of complication and reporting and accountancy job program built into the system.
In either case, that gigantic refund is getting even bigger!!!

More to the point, how is mortgage anything actually pro-growth? He sounds like he's against creating unnecessary accountancy jobs, but what do YOU call it if you're encouraging people never to pay off their mortgages? I call that a lot of accountancy job creation and not a whole lot of increase of standard of living for the rest of us.

And how about medical deductions? Rand, you wanna clarify that please? There are a lot of people out there who recognize that a large chunk of the problem with our medical system is exactly that true costs are obscured and therefore spiral out of control, and it's all because employers are offering tax-free medical programs as incentives to work for them.
You wanna maybe point out that all that goes away the minute you stop allowing us to deduct medical expenses? I think that's kind of important! You can either phrase it in libertarian terms (that in the long run costs go down and quality of care goes up).... OR, you can allow your enemies to phrase the argument, and it's going to go exactly like this: "RAND WANTS TO TAKE AWAY YOUR EMPLOYER-SUBSIDIZED MEDICAL CARE!!!!"

[jllundqu]

Rand should also propose removing all withholding requirements and make the tax bill due the day before election day.

I've always supported this idea! Man, people would be a LOT more attentive to government pigs if they were forced to pay the bill themselves...

[RabbitMan]

Watch 2 videos:

https://www.youtube.com/watch?v=MnDd_M7R6eE

https://www.youtube.com/watch?v=dQw4w9WgXcQ

Ugh, not a huge fan of what Rand proposed in the second video. Why didn't he just stop with the first populist one?

[Sam I am]

I like the idea of simplifying the tax code, but What I really don't want to see is for the government revenue to go down while the government spending stays the same. Cutting $2 billion from the amount we spend is going to be a hard sell, especially considering that the main objective of the single most powerful lobbyist group is to keep medicare and social security around.

[helmuth_hubener]

Rand should also propose removing all withholding requirements and make the tax bill due the day before election day.

How about the day after?

[CaptUSA]

Libertarian thought process defined:


OMG SECOND ONE IS AWESOME


RAND 2016 !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!


Ugh, not a huge fan of what Rand proposed in the second video. Why didn't he just stop with the first populist one?

[Occam's Banana]

Ugh, not a huge fan of what Rand proposed in the second video. :confused: So ... you're saying you want Rand to make you cry, say goodbye, tell a lie and hurt you ... ? :eek:

[fisharmor]

Libertarian thought process defined:

I dunno, I like how libertarians generally click through and become at least familiarized with what the actual argument is.
Personally, I think the second video epitomizes libertarian society. A statist system would not - could not - produce a video of such caliber, and bestow on it such lasting utility.

[PierzStyx]

Well, this is better than the current model. 14.5% would eliminate loopholes. It has a lot to mollify liberals as well. The rich almost never pay the full 35%. Mitt Romney only paid about 13% during the last Presidential Circus. This would make him, and others like him, pay a higher amount, period. Plus, and this is a HUGE thing, the first $50,000 would be tax free, which would mean most people in the country wouldn't pay any taxes. For conservatives, the cut in corporate taxes, payroll taxes, capital gains taxes, death taxes, income taxes, etc. is a huge boon for personal and economic prosperity. So, yes. Much better than the current model.

That said, the only fair tax is his father's proposed flat taxes of 0-0-0.

[jtap]

611496113330241536

Funny to hear the "point five" that was obviously recorded in different settings and spliced in and doesn't fit at all. I hate seeing (hearing) such amateurish video editing and production. For me it distracts a bit and makes me wonder what level of people he has working for him. The message is great though it leaves many questions.

[jllundqu]

:confused: So ... you're saying you want Rand to make you cry, say goodbye, tell a lie and hurt you ... ? :eek:

I'm soooo confused.... the second video is a shitty 80s music cover video.... Did I miss something?

[Sola_Fide]

I would prefer blow up the tax code and then stop there. Hey, I can dream right? :D

Me too.

[Barrex]

I'm soooo confused.... the second video is a shitty 80s music cover video.... Did I miss something?

You need to watch carefully. Rand is there.


Also:

"blow it up", "put a stake through it"... very aggressive for someone who is advocating non-aggression.

[r3volution 3.0]

https://i.imgflip.com/n34j7.jpg


I've been waiting for Rand to go hardcore fiscal conservative for months (since he's been focusing instead on other issues recently), because this is where he really distinguishes himself from the others in a way that most resonates with the primary voters (and because it's the issue I personally think is most important). And Rand did not disappoint!

[garyallen59]

Beck and company were drooling over Rand's tax plan today. Pat the one who usually hates on Rand said it made him want to leave the radio show and work to get Rand elected like Kibbe. Pretty good stuff.

[RichardAlpert]

this is a very nice move by the campaign! well-played

[francisco]

Rand should also propose removing all withholding requirements and make the tax bill due the day before election day.

Ooooooh I Like this idea! +rep

Oops, out of rep--I already gave rep for posting the op-ed in the first place!

Can someone please cover?

BTW, there was a positive news article about Rand's tax plan in the WSJ. Hopefully this gets a lot of traction.

[puppetmaster]

I approve. Never perfect but so much better. Imagine millions of people with a bunch more take home pay...that is a huge benefit to the economy.

[Michael Landon]

Ooooooh I Like this idea! +rep

Oops, out of rep--I already gave rep for posting the op-ed in the first place!

Can someone please cover?


Done.

- ML

[Sola_Fide]

Rand should also propose removing all withholding requirements and make the tax bill due the day before election day.

If that ever happened there would be revolt in this country. The elites would never let it happen.

[WD-NY]

Beck and company were drooling over Rand's tax plan today. Pat the one who usually hates on Rand said it made him want to leave the radio show and work to get Rand elected like Kibbe. Pretty good stuff.

YouTubes or it didn't happen! :p

[Jamesiv1]

How to be like Rand Paul:

Kick ass
Take names later

[eleganz]

Glenn says Rand has the best platform on the IRS out of every single candidate.


https://www.youtube.com/watch?v=-F_mFPaTIZo

[georgiaboy]

I want to see someone actually blow up 70,000 pages of tax code.

C'mon, youtubers!

A box of copy paper is 5k sheets (10 reams @ 500 sheets/ream), so 14 boxes for 70k pages. Easy-peasy.

[Jackie Moon]

611676403763798016

611680215333376000

[harikaried]

Does it follow then that he's proposing we also eliminate medicare/medicaid payroll deductions, and roll that into the one rate?The text says it eliminates the payroll tax, so that's the 6.2% for social security and 1.45% for Medicare (for the employee). This is one of the main differentiators of this plan compared to other flat tax proposals. Eliminating the payroll tax and the first $50k income exemption are what benefits the median US household, which has an income around $50k. This means that median household pays $0 taxes based on income with this plan compared to roughly $6200 (12% of income) currently. This is a 100% savings on income taxes.

Here's various savings based on some income amounts:

$25k income: 8% taxes now, 0% taxes with Rand = 100% saving
$50k income: 12% taxes now, 0% taxes with Rand = 100% saving
$75k income: 16% taxes now, 5% taxes with Rand = 69% saving
$100k income: 18% taxes now, 7% taxes with Rand = 59% saving
$125k income: 20% taxes now, 9% taxes with Rand = 56% saving
$150k income: 21% taxes now, 10% taxes with Rand = 54% saving
$175k income: 22% taxes now, 10% taxes with Rand = 53% saving
$200k income: 23% taxes now, 11% taxes with Rand = 52% saving


In order not to tax the first $50k they're either
1) going to not withhold for the first part of the year, meaning that after I hit $50k I will start having withholdings, which I am totally not cool with, or
2) they're going to have to charge 14.5% all year, and if I have (for example) a $60k salary they'll have to withhold $8700. But 14.5% of the taxable revenue is only $1450, so they'll have to refund me a whopping $7250, which they've drawn interest on all year instead of me doing it.There won't be much change in how much is withheld each paycheck in that employers already handle exemptions/deductions based on the allowances people file on their W-4. I.e., there will not be a jump in take home pay because each paycheck's withholding already factors in the "first $50k tax free."

[FreedomProsperityPeace]

I've been waiting for Rand to go hardcore fiscal conservative for months (since he's been focusing instead on other issues recently), because this is where he really distinguishes himself from the others in a way that most resonates with the primary voters (and because it's the issue I personally think is most important). And Rand did not disappoint!Exactly. This is what I've wanted, as well. It seems to be working...lots of excitement and positivity already from the announcement. He should keep it up! http://www.ronpaulforums.com/images/icons/icon14.png

[Brian4Liberty]

Zero income tax would be preferable, but Rand's plan is the best one proposed at the moment.


All deductions except for a mortgage and charities would be eliminated. The first $50,000 of income for a family of four would not be taxed. For low-income working families, the plan would retain the earned-income tax credit.

Mortgage? Banking interests already have an exemption? This is why flat and simple always devolves into what we have today. More and more exceptions for powerful special interests.

And over at the New York Times, they are already screaming that they need more deductions:

http://www.nytimes.com/2015/06/19/upshot/rand-paul-and-the-vat-that-dare-not-speak-its-name.html

[r3volution 3.0]

Mortgage? Banking interests already have an exemption?

It's not for the bankers, it's for the mortgagees (who vote, you know). That deduction is extremely popular.

[rich34]

Damn, it'd be great if the fair tax crowd was around today, (maybe they are?) similar to how they were in 2008 for Mike Huckabee. That fair tax proposal is truthfully what kept Huckabee alive financially. Since Huckabee was the first to jump out in support of this proposal along with pushing it hard in his platform they dumped millions of dollars into his campaign. The funny thing is Rand's plan blows that plan going around back then plum out of the water, absolutely no comparison. So here's to hoping the fair tax/anti tax crowd really jump out and support Rand financially for this bold proposal. If Rand could get team Beck to start pushing him the same way they have been Cruz I think that would really go a long way in helping Rand to peel away the support from Cruz to go along with his already solid support. Even if it's just soft support a 3% bump in the polls from Iowa, NH, to nationally would go a long way in building up momentum and hopefully force fox news into putting Rand into "their top 3" category. This proposal alone may just be the start of setting Rand on an upward trajectory in the polls all over. Perception is everything, and it would be a great time for Rand to start climbing in the polls right before the first debate.

[Jackie Moon]

Damn, it'd be great if the fair tax crowd was around today, (maybe they are?) similar to how they were in 2008 for Mike Huckabee. That fair tax proposal is truthfully what kept Huckabee alive financially. Since Huckabee was the first to jump out in support of this proposal along with pushing it hard in his platform they dumped millions of dollars into his campaign. The funny thing is Rand's plan blows that plan going around back then plum out of the water, absolutely no comparison. So here's to hoping the fair tax/anti tax crowd really jump out and support Rand financially for this bold proposal. If Rand could get team Beck to start pushing him the same way they have been Cruz I think that would really go a long way in helping Rand to peel away the support from Cruz to go along with his already solid support. Even if it's just soft support a 3% bump in the polls from Iowa, NH, to nationally would go a long way in building up momentum and hopefully force fox news into putting Rand into "their top 3" category. This proposal alone may just be the start of setting Rand on an upward trajectory in the polls all over. Perception is everything, and it would be a great time for Rand to start climbing in the polls right before the first debate.

Agree. This is very popular and can give him that extra boost going in to the beginning of the campaign and debate season.

I mean... Herman Cain was in the lead for awhile last time and his whole platform was just "9-9-9".

[GunnyFreedom]

this plan would seriously change my life. Just as an ordinary person doing what I do, having never been involved in politics. The way I am self employed; my burdens to market entry would just fall away. I can just see the richer soil.

[GunnyFreedom]

I like it because it is a straight attempt to write an original Constitutional principle into the current paradigm. The apportioning of taxes to the States (the States collect XYZ tax and pay their portion to the federal government according to the number of population in your State.) and leave the State to determine how it collects revenue.

The idea was "balanced equally on all persons." In today's withholding state and wage taxation nobody really knows where the balance lands. By restoring an original Constitutional principle into existence within a currently-written Constitutional paradigm, I find myself thoroughly impressed. If carried out, this could fully prepare the economy and the nation as a whole to repeal the 16thA and restore State apportioning. The restoration of State apportioning will make the States the king governments in America again.

[chronicaust]

Call me ignorant lol but can someone compare and contrast this to the FAIRtax? I am having a conversation with my dad about it and I'm not sure how to differentiate the two. I understand one is a sales tax and one is basically an income tax for individuals and businesses.

[r3volution 3.0]

Damn, it'd be great if the fair tax crowd was around today, (maybe they are?) similar to how they were in 2008 for Mike Huckabee. That fair tax proposal is truthfully what kept Huckabee alive financially. Since Huckabee was the first to jump out in support of this proposal along with pushing it hard in his platform they dumped millions of dollars into his campaign. The funny thing is Rand's plan blows that plan going around back then plum out of the water, absolutely no comparison. So here's to hoping the fair tax/anti tax crowd really jump out and support Rand financially for this bold proposal. If Rand could get team Beck to start pushing him the same way they have been Cruz I think that would really go a long way in helping Rand to peel away the support from Cruz to go along with his already solid support. Even if it's just soft support a 3% bump in the polls from Iowa, NH, to nationally would go a long way in building up momentum and hopefully force fox news into putting Rand into "their top 3" category. This proposal alone may just be the start of setting Rand on an upward trajectory in the polls all over. Perception is everything, and it would be a great time for Rand to start climbing in the polls right before the first debate.

Team Beck were having mental orgasms over this tax plan today.


https://www.youtube.com/watch?v=-F_mFPaTIZo

...meanwhile, the SS Cruz is taking on water due to TPA et al.

I can feel the conservative-tea-party energy swinging in Rand's favor.

[puppetmaster]

The text says it eliminates the payroll tax, so that's the 6.2% for social security and 1.45% for Medicare (for the employee). This is one of the main differentiators of this plan compared to other flat tax proposals. Eliminating the payroll tax and the first $50k income exemption are what benefits the median US household, which has an income around $50k. This means that median household pays $0 taxes based on income with this plan compared to roughly $6200 (12% of income) currently. This is a 100% savings on income taxes.

Here's various savings based on some income amounts:

$25k income: 8% taxes now, 0% taxes with Rand = 100% saving
$50k income: 12% taxes now, 0% taxes with Rand = 100% saving
$75k income: 16% taxes now, 5% taxes with Rand = 69% saving
$100k income: 18% taxes now, 7% taxes with Rand = 59% saving
$125k income: 20% taxes now, 9% taxes with Rand = 56% saving
$150k income: 21% taxes now, 10% taxes with Rand = 54% saving
$175k income: 22% taxes now, 10% taxes with Rand = 53% saving
$200k income: 23% taxes now, 11% taxes with Rand = 52% saving

There won't be much change in how much is withheld each paycheck in that employers already handle exemptions/deductions based on the allowances people file on their W-4. I.e., there will not be a jump in take home pay because each paycheck's withholding already factors in the "first $50k tax free." actually he says workers will see a big increase in their paychecks.

[Krugminator2]

I think the structure of this plan is probably ideal for extracting revenue while having the fewest distortions. A consumption tax paired with and income tax makes sense. It is also good that it excites conservatives.

I do wish Rand would tone down the tax cuts as a stimulus. That is pure Keynes as I and everyone who has ever taken a macroeconomics course learned. Milton Friedman didn't buy into all of this. The spending is either paid for by taxes and inflation or investment in treasuries that crowds out private sector investment.

[chronicaust]

I think the structure of this plan is probably ideal for extracting revenue while having the fewest distortions. A consumption tax paired with and income tax makes sense. It is also good that it excites conservatives.

I do wish Rand would tone down the tax cuts as a stimulus. That is pure Keynes as I and everyone who has ever taken a macroeconomics course learned. Milton Friedman didn't buy into all of this. The spending is either paid for by taxes and inflation or investment in treasuries that crowds out private sector investment.

It's okay as long as the voters buy it. But I mean in reality if the government cuts taxes and spending it's leaving more money in the private sector, which is always a good thing.

[Brian4Liberty]

It's not for the bankers, it's for the mortgagees (who vote, you know). That deduction is extremely popular.

Consumers rarely lobby government for their favorite products to be tax deductible. On the other hand, business interests are constantly lobbying for government to give them special treatment.

[r3volution 3.0]

I do wish Rand would tone down the tax cuts as a stimulus. That is pure Keynes as I and everyone who has ever taken a macroeconomics course learned. Milton Friedman didn't buy into all of this. The spending is either paid for by taxes and inflation or investment in treasuries that crowds out private sector investment.

Except that Rand is pairing this with major spending cuts.

...he hasn't come out with a specific proposal this year, but every year since he's been in office he's proposed something in the $500 billion range.

I expect he'll put out a new budget in coming weeks/months.

[Jackie Moon]

611716308447563776


http://media.giphy.com/media/ToMjGpjpXMFPshSYGLm/giphy.gif

[r3volution 3.0]

^^^

https://s3.amazonaws.com/static.carthrottle.com/workspace/uploads/comments/20f4c63a65069d4238dd1e051ef660-54e76fa24f3bc.jpg

[Vanguard101]

Anyone know where I can find the complete plan?

[Krugminator2]

Except that Rand is pairing this with major spending cuts.

...he hasn't come out with a specific proposal this year, but every year since he's been in office he's proposed something in the $500 billion range.

I expect he'll put out a new budget in coming weeks/months.

I get that. You are right. But my point is the good stimulative effects only happen with spending cuts. The names Rand is dropping aren't really as interested in budget cuts as Rand is.

That said. It looks like it is resonating. That is most important.

[EBounding]

611716308447563776




This is a great positive message that will appeal to a lot of people. It's one of the main things the campaign has been missing.

[r3volution 3.0]

I get that. You are right. But my point is the good stimulative effects only happen with spending cuts. The names Rand is dropping aren't really as interested in budget cuts as Rand is.

That said. It looks like it is resonating. That is most important.

I hear ya, and I'm sure you're quite aware of Rand's propensity for budget cutting (my statement was more for the lurkers' benefit...).

We're on the same page.

Now, let us look forward like a hungry dog to his budget! :)

[r3volution 3.0]

Anyone know where I can find the complete plan?

I don't believe it's been released yet.

[Crashland]

How does his facebook video have over 1 million views, but his youtube video which was only released a few hours later, has less than 5,000?

[georgiaboy]

611716308447563776



In the video, Rand says this is only the first step in his overall plan to defeat the Washington Machine.

Ergo, this is just the beginning - there's more to come!

[Uriah]

How to be like Rand Paul:

Kick ass
Take names later

Actually, Rand won't kick your ass unless you try to kick his. He won't take your name either. Unless, he has a warrant.


this plan would seriously change my life. Just as an ordinary person doing what I do, having never been involved in politics. The way I am self employed; my burdens to market entry would just fall away. I can just see the richer soil.
I'm thinking of all the years I've worked and the thousands I could have saved and invested. Perhaps, I would have started my own business buy now. Make it so Rand.


Anyone know where I can find the complete plan?
Ditto. I want the details. Although, I'm sure he is trying to brand himself and the plan before people get caught up in details and pick it apart. Smart.

[GunnyFreedom]

“And we eliminate the payroll tax.” :eek:


https://www.youtube.com/watch?v=xFMqsN8t5Lo

[GunnyFreedom]

outright applause from...who is that guy "Deacy?"

[Crashland]

Not sure why I noticed this, but in Rand's tax video, the kid/laptop clip at 0:19 and of the flag at 1:12 are the same clips from this 2012 Gingrich ad at 0:44 and 0:04, respectively


https://www.youtube.com/watch?v=B7fJnDuVkTY

[GunnyFreedom]

Not sure why I noticed this, but in Rand's tax video, the kid/laptop clip at 0:19 and of the flag at 1:12 are the same clips from this 2012 Gingrich ad at 0:44 and 0:04, respectively


https://www.youtube.com/watch?v=B7fJnDuVkTY

Welcome to multimedia and professional ad production. :)

[jurgs01]

Why does the RPF's occasionally freeze up and then save multiple duplicate posts?

Methinks your connection or computer freezes up and you submit the same page multiple times.

[phill4paul]

Methinks your connection or computer freezes up and you submit the same page multiple times.

No and yes. Lately it has not been at the user end. Otherwise it would happen on other forums. Which it doesn't.

[Crashland]

No and yes. Lately it has not been at the user end. Otherwise it would happen on other forums. Which it doesn't.

The freezing is on the RPF side. The multiple posts is on the user side when you try resubmitting or refreshing the page in the middle of said freeze :-P

[Jamesiv1]

I want to see someone actually blow up 70,000 pages of tax code.

C'mon, youtubers!

A box of copy paper is 5k sheets (10 reams @ 500 sheets/ream), so 14 boxes for 70k pages. Easy-peasy.
That would make an awesome campaign ad.

[phill4paul]

The freezing is on the RPF side. The multiple posts is on the user side when you try resubmitting or refreshing the page in the middle of said freeze :-P

Negative. Without resubmitting or refreshing the timeout ends in multiple posts.

[VictorB]

Honestly not feeling the whole "family of four" deal. It's essentially penalizing people who don't want or have a large (larger) family. Seems he could have done without that part. The first $50k should be exempt regardless of how many are in your household.

[Jackie Moon]

How does his facebook video have over 1 million views, but his youtube video which was only released a few hours later, has less than 5,000?

Part of it might be YouTube's thing of showing a lower view count for awhile after a video is launched.

And Facebook just makes it easier to share and get it seen by so many more people. His page has 2 million likes, so there's a good chunk of people that automatically get it right in their feed rather than having to find it on YouTube.

They actually uploaded it twice on Facebook... the first one has over 1.13 million views, 30k+ shares, 25k likes and 2k comments.

And the second version has over 51k views, 2,200 shares, and 7k likes.

The work put in to building up his Facebook reach over the past few years will really pay off now.

[Uriah]

http://taxfoundation.org/blog/economic-effects-rand-paul-s-tax-reform-plan



By
Andrew Lundeen,
Michael Schuyler

Senator Rand Paul (R-KY), a candidate for president, recently announced his plan to reform the U.S. tax code. His proposal, the “Flat and Fair Tax,” would move to a 14.5 percent tax rate on all types of income with a sizable deduction and exemption, eliminate the corporate tax to create a 14.5 percent business transfer tax paid by businesses on profits and wages, introduce full expensing for investments in capital, and eliminate the payroll tax on both the employer and employee.

Our analysis finds that Senator Paul’s plan would grow the economy by 9.4 percent in the long run, create 1.4 million jobs, and cost $2.97 trillion over ten years on a static basis and $960 billion when accounting for economic growth.

Structure of the Tax Reform Plan

Sen. Paul would make a number of changes to the tax code for individuals. He would replace the current seven tax bracket structure with a flat rate of 14.5 percent and apply that tax rate to all income – wages and salaries, capital gains, dividends, interest, and rents.

The plan would include a $15,000 standard deduction (per filer) and a $5,000 per person personal exemption. This means that a family of four would pay no income tax on their first $50,000 of income ($55,000 for a family of five, etc.).

Retirement accounts remain as they currently are and in our modeling we assumed that the exclusion for employer-provided health care remains.

The plan retains home mortgage and charitable deductions, the earned income tax credits, and the child tax credit and eliminates all other tax credits and deductions.

The plan would eliminate the payroll tax, the estate tax, and all customs duties and tariffs.

On the business side, the plan would eliminate the corporate tax, create a territorial type system, and introduce a 14.5 percent business transfer tax. This tax would be levied on a business’s factors of production and tax all capital income (profits, rents, royalties) and all labor payments (wages and salaries). All capital expenses (machines, equipment, buildings, etc.) are fully expensed in the first year, which would do away with current depreciation schedules. This tax would also apply to wages paid by governments and nonprofits.

The Economic and Revenue Estimates of the Plan

According to our Taxes and Growth Model, Senator Paul’s tax reform proposal would increase GDP by 9.4 percent by the end of roughly 10 years (it may be shorter or longer depending on how long it takes business to pull permits for new buildings, supply chains to adjust, etc.). This is equivalent to average additional growth of a little under 1 percentage point per year.

This growth is largely due to a cut in the service price of capital, which is a result of lower taxes on businesses and investment, specifically the tax cut to 14.5 percent on business profits, the 14.5 percent rate on capital gains and dividends, and the shift to full expensing. These tax changes result in an increase of the capital stock of 35.9 percent by the end of the adjustment period and results in higher after tax wages of 5.5 percent.

Additionally, the tax cut on wage income to 14.5 percent also increases the incentive to work and results in 1.5 percent additional private business hours of work. This is equivalent to 1.4 million full-time jobs.

On a static basis, Senator Paul tax reform plan would lose nearly $3 trillion over a ten-year period, with an average annual cost of about $300 billion. If we account for the growth of the economy, over time this would lead to a smaller tax costs. We estimate the revenue loss at about $1 trillion on a dynamic basis.

Distributional Analysis

On a static basis, Senator Paul’s plan would increase after tax income a total of 4 percent across all taxpayers. When not considering growth, it would have little to no effect on after tax income for those making under $10,000 of income and increase after tax income to varying degrees for all other income groups.

The little to no change in after tax income for filers with AGI under $10,000 is due to the elimination of the payroll tax and how that would interact with the change in labor compensation due to the business transfer tax, which has a secondary effect related to the phase-ins of the child tax credit and the earned income tax credit. On the whole, many people in this income group would likely receive a tax cut.

On a dynamic basis, the plan would increase after tax incomes by a total 16 percent for all income groups. Filers with income below $10,000 would see their income increase by over 10 percent. Taxpayers in income groups between $20,000 and $75,000 would see their incomes go up by about 14. Those with incomes above $500,000 would see their incomes go up over 20 percent.

More at link(copy-paste screws up format)

[JohnCifelli1]

Shared his plan with my social network last night and it got unanimous support. My network is slanted liberal. Its a very good sign.

[Uriah]

Shared his plan with my social network last night and it got unanimous support. My network is slanted liberal. Its a very good sign.

I imagine it would as it ends loopholes that favor the wealthy. From a populist point of view it appears fair and that's exactly what most people want.

[pao]

"Not sure why I noticed this, but in Rand's tax video, the kid/laptop clip at 0:19 and of the flag at 1:12 are the same clips from this 2012 Gingrich ad at 0:44 and 0:04, respectively"

I am sure somebody, somewhere will somehow cry plagiarism over it.

[devil21]

Anyone know where I can find the complete plan?

Sure, it's right here:
http://www.ronpaulforums.com/showthread.php?470248-Interesting-appeals-court-ruling-in-Canada-debt-based-money-is-done

You're welcome. The Fed is going away, as is the current IRS. This has already been decided and is in the works.

[Sola_Fide]

I shared this with some of my Republican friends. They ate it up.

[francisco]

I want to see someone actually blow up 70,000 pages of tax code.

C'mon, youtubers!

A box of copy paper is 5k sheets (10 reams @ 500 sheets/ream), so 14 boxes for 70k pages. Easy-peasy.

"You see your duty quickly, citizen," said Sideki. "You should do all this before this very day is gone." --R.A. Lafferty, Polity and Custom of the Camiroi

[harikaried]

Honestly not feeling the whole "family of four" deal. It's essentially penalizing people who don't want or have a large (larger) family. Seems he could have done without that part. The first $50k should be exempt regardless of how many are in your household.The proposal is $15k exemption per filer (so $30k joint) and $5k per dependent. It's relatively consistent (but with larger numbers) with the current tax code where a single filer gets ~$10k in deduction/exemptions; married gets ~$20k; additional dependents are ~$4k exemption.

[Occam's Banana]

Why does the RPF's occasionally freeze up and then save multiple duplicate posts?

Methinks your connection or computer freezes up and you submit the same page multiple times.

The freezing is on the RPF side. The multiple posts is on the user side when you try resubmitting or refreshing the page in the middle of said freeze :-P

Notice the timestamp on anaconda's first post (http://www.ronpaulforums.com/showthread.php?476944-Rand-s-WSJ-Op-Ed-Blow-Up-the-Tax-Code-and-Start-Over&p=5899744&viewfull=1#post5899744): 3:38 AM CDT (a different hour may be shown for you, depending on your time zone).

RPFs "freezes" every day from about 3:35 to 3:40 AM CDT. I assume that some kind of automated "housekeeping" is being done during this time (cleaning up and compressing databases or stuff like that, I would guess).

If you try to post anything during that time, you are apt to end up with one or more duplicates of your post. This seems to happen when you try to submit a post while the housekeeping process is running. To avoid this, don't try to post anything during this five-or-so minute "window."

If you do try to post something during this time and you get a prompt to "leave the page" or "resend," choose "leave the page" - "resend"ing will result in a duplicate post.

My guess for why this happens - and this is pure, wild-ass speculation on my part (I know nothing about vBulletin internals) - is that when you submit a post during housekeeping, you post is temporarily stored in a queue until the the housekeeping process terminates (at which time your queued post will be submitted). At the same time, the submission process "times out" (because the post database is not available for modification during housekeeping) and asks whether you want to resubmit your post - even though your post is already queued for submission. (Apparently the submission process is unaware of the housekeeping process's temporary queue for submissions.) Or something like that ...

[axiomata]

The proposal is $15k exemption per filer (so $30k joint) and $5k per dependent. It's relatively consistent (but with larger numbers) with the current tax code where a single filer gets ~$10k in deduction/exemptions; married gets ~$20k; additional dependents are ~$4k exemption.

30+5+5=40 not 50

[Uriah]

30+5+5=40 not 50

It's not $5k per dependent rather $5k per person. 15+15+5+5+5+5=50

[Bastiat's The Law]

I've always supported this idea! Man, people would be a LOT more attentive to government pigs if they were forced to pay the bill themselves...

Precisely! Make the mouthbreathers aware.

[Bastiat's The Law]

Beck and company were drooling over Rand's tax plan today. Pat the one who usually hates on Rand said it made him want to leave the radio show and work to get Rand elected like Kibbe. Pretty good stuff.

Got a link?

[Bastiat's The Law]

I like it because it is a straight attempt to write an original Constitutional principle into the current paradigm. The apportioning of taxes to the States (the States collect XYZ tax and pay their portion to the federal government according to the number of population in your State.) and leave the State to determine how it collects revenue.

The idea was "balanced equally on all persons." In today's withholding state and wage taxation nobody really knows where the balance lands. By restoring an original Constitutional principle into existence within a currently-written Constitutional paradigm, I find myself thoroughly impressed. If carried out, this could fully prepare the economy and the nation as a whole to repeal the 16thA and restore State apportioning. The restoration of State apportioning will make the States the king governments in America again.

Exciting huh?

[Bastiat's The Law]

Honestly not feeling the whole "family of four" deal. It's essentially penalizing people who don't want or have a large (larger) family. Seems he could have done without that part. The first $50k should be exempt regardless of how many are in your household.

Darn, I thought the first 50k I make was exempt. I don't want to pay for a family of four to keep my 50k :(

[LatinsforPaul]

Got a link?

https://soundcloud.com/glennbeck/prayers-for-charleston-south-carolina-61815#t=1:54:10

and...


https://www.youtube.com/watch?v=-F_mFPaTIZo

[RabbitMan]

Darn, I thought the first 50k I make was exempt. I don't want to pay for a family of four to keep my 50k :(

I have a feeling that it will be more in the range of $30k for individuals.

[Bastiat's The Law]

I have a feeling that it will be more in the range of $30k for individuals.

Still a nice savings, but it should be 50k exempt across the board and I'd be all over this!

[anaconda]

Thanks to everyone that chimed in about the multiple post issue: jurgs01, phill4paul, Crashland, & Occam's Banana.

[anaconda]

Honestly not feeling the whole "family of four" deal. It's essentially penalizing people who don't want or have a large (larger) family. Seems he could have done without that part. The first $50k should be exempt regardless of how many are in your household.

Couldn't agree more. Hopefully that was just some type of loose "talking" point, or at least something Rand will "walk back" more sooner than later.

[Brian4Liberty]

One of the best aspects about Rand's plan is that it keeps personal, business and corporate rates all the same. A separate tax code for personal and corporate taxes is by definition corporatist in nature.