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ATR Summary of Perry Tax Plan


Posted by Ryan Ellis on Tuesday, October 25th, 2011, 12:06 PM PERMALINK


Optional Flat Personal Income Tax

  • Optional system for those who want to switch over: if you like your tax code, you can keep it.  This will be a popular option for low income filers, especially.
  • 20 percent flat rate on all personal income.  Details yet to be specified here.
  • 0 percent rate on long-term capital gains and qualified dividends
  • Standard deduction of $12,500 per person (e.g., $50,000 for a family of four)
  • Itemized deduction alternative for families making less than $500,000: mortgage interest, state and local taxes, charitable contributions only

Business Tax Reform

  • 20 percent flat rate on all business profits for all business forms: corporations, S-corporations, partnerships, LLCs, and sole proprietorships
  • Full business expensing of all new business purchases
  • Research and development tax credit retained
  • One-year repatriation holiday of 5.25%, followed by territoriality
  • Eliminates all business deductions and credits not part of a consumption base

Obamacare

  • There are 20 new or higher taxes in the Obamacare law.  These include: the individual and employer mandate excise taxes, the 3.8 percent surtax on investment income, the “Cadillac plan” tax, the “medicine cabinet tax,” the “tanning tax,” a hike in the Medicare payroll tax, and HSA tax hikes.
  • Perry’s plan repeals all 20 new or higher taxes in Obamacare.

Social Security Taxation

  • Younger workers could voluntarily establish personal retirement accounts to pre-fund their own Social Security benefits
  • Social Security benefits would be free of taxation under the flat tax       

Other Tax Features        

  • No new taxes: no national sales tax, no value-added tax (VAT)
  • Kills the death tax permanently
  • Requires a tax hike supermajority in a balanced budget amendment
  • Calls for dynamic scoring of tax legislation

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