Sen. Rand Paul is unveiling an aggressive plan to "blow up the tax code and start over" with a federal flat tax of 14.5 percent.
The plan, laid out in an op-ed commentary
in the Wall Street Journal Thursday night, would chop the government’s tax take by over $2 trillion over 10 years, or at least 5 percent, the Journal reports. And it would require big speeding cuts, but the Kentucky Republican predicts his plan would boost economic growth by nearly a percentage point a year, the Journal reports.
"My tax plan would blow up the tax code and start over," the GOP presidential contender writes in his op-ed piece. "I devised a 21st-century tax code that would establish a 14.5 percent 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."
Paul says his plan would also apply the same tax-rate on all companies that currently pay up to 35 percent, while small businesses profits are taxed at rates as high as 39.6 percent.
One of the few targeted tax breaks Paul would keep is the earned-income tax credit, a wage supplement for lower-income working families,
the Journal notes in an analysis of the plan.
Paul says his plan would "turbocharge the economy and pull America out of [its] slow-growth rut of the last decade."
In an interview with the Journal, Paul said the element missing in other flat-tax proposals is the idea of repealing the payroll taxes on workers, which are used to fund Social Security and Medicare.
"It shows that we have something we can offer to the working class," he tells the Journal.
"The question we have for Hillary Clinton is: How are you going to help the working class?"
Paul said, however, his plan would still "fully fund" Social Security and Medicare because it specifies that incoming business-tax revenues go first to fund those programs.
"Republicans haven’t been bold enough in the past," he tells the Journal, adding his idea could pick up steam if it became central to the 2016 presidential campaign.
"You have to win an election based on the plan. This is what I’m going to run on."
According to the Journal, other GOP contenders working on flat-tax plans include Texas
Sen. Ted Cruz, former Texas Gov. Rick Perry and retired neurosurgeon
Ben Carson, who wants a rate of 10 percent.
Mike Huckabee is proposing a consumption tax, and New Jersey Gov.
Chris Christie wants three rates for individuals, with a top rate of 28 percent.
Florida Sen.
Marco Rubio would reduce the number of rates to just two.