Rand Paul Tax Plan

[Belsnickel]

(06-19-2015, 01:59 AM)StLucieBengal Wrote: http://www.breitbart.com/big-government/2015/06/18/rand-paul-releases-fair-and-flat-tax-plan-calls-for-2t-in-cuts/

Rand Paul Tax plan:
14.5% Flat Tax ( all personal income, including wages, salaries, dividends, capital gains, rents and interest.)
Eliminate Payroll Tax (Specifies business taxes must fund Social Security and Medicare obligations first)
Eliminate most tax loopholes (Charitable donations and Mortgage interest deductions preserved)
Eliminate gift and estate taxes and all duties and tariffs
First $50,000 of income is exempt from taxation for family of four / Preserves Earned Income Tax Credit(EITC) for low income families
Plan is expected to lower taxes by 2 trillion dollars over 10 years and increase economic growth by nearly 1% per year

So I will address these point by point as far as my take on things. I have some commentary on something else he mentioned that isn't listed here as well:

1. 14.5% is a good number. I'm not going to spend the time crunching the numbers as to the full effects, but I think upping it to maybe 16% for something I mention later on may be good.
2. Eliminating the payroll tax is something that I find to be an intriguing idea. Putting the burden on the employer to pay for OASDI/HI is interesting and I'm not sure how many businesses would take it. Would definitely be a boost to the people.
3. I'm about eliminating all tax loopholes. Leaving charitable donations and mortgage is an interesting move, and something that shows he is still pandering to the GOP with this some. These two deductions are, in today's society, only available to upper and upper-middle class America. Just close them all and make this a true flat and fair tax.
4. Gift and estate taxes as they stand only come into play for a small portion of the country. I don't know why this is such a big fight for them to be gone. It was funny, my parents were told to look at transferring property to me now to avoid these taxes. I told them don't bother, they don't own enough for it to be an issue. When you gain income from any other source, taxes are paid. I'm not sure why people think that there shouldn't be taxes on gifts and estates. But I digress. Duties and tariffs. That is an interesting one. They don't do much for our budget now but considering how much we are fighting the whole free trade idea right now I will be shocked if people accept that considering it is the epitome of free trade. Well, I probably won't be shocked because I don't think most people know what free trade actually means beyond the pundit buzzword of the quarter.
5. I like that he wants to keep the EITC. What I think would be a great idea and have proposed all along, going back to number 1, is to set a panel of economists to look at the average CoL around the country. Maybe 150% of poverty level or something. Set that amount for single, married, number of dependents, and that amount based on your return is tax free. This makes your basics be covered tax free, essentially. Now, CoL is different all over the country, but since this is a federal thing we would unfortunately have to rely on an average. Ideally, each state could then use more specific information to make their taxes offset some things. The tax codes in this country are so convoluted that the states should get in on a revamp as well.
6. I'm all for lowering taxes, once we fill in this hole a bit more. As for the economic growth, I can see some coming from this, but the elimination of duties and tariff will see to a decrease in net exports for us.
7. On the Breitbart link he mentioned: "Business benefit from how my plan will simplify deductions by getting rid of current expense depreciation schedules and making capital expenses deductible in the first year." This is someone who doesn't understand finance/accounting. This can help some businesses, hurt others. One thing is for certain in that it will keep my former colleagues, the corporate tax accountants of the world, employed as this will be a mess to sort out the differences between GAAP/FASB/IASB/SEC reporting and what the IRS would want.