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GOP candidate Perry proposes optional flat tax system

10-26-2011 08:41 BJT

WASHINGTON, Oct. 25 (Xinhua) -- U.S. Republican presidential candidate Rick Perry outlined his economic plan Tuesday to resolve the nation's complex economic problems, calling for an optional flat tax to replace the current income tax system.

The Texas governor summarized his plan in an op-ed published on Tuesday's Wall Street Journal, hours before his scheduled speech on economic policy in South Carolina, an early voting state.

Calling his proposal "Cut, Balance and Grow," Perry was apparently trying to woo congressional Republicans, whose major budget agenda was named "Cut, Cap and Balance."

"The plan starts with giving Americans a choice between a new, flat tax rate of 20 percent or their current income tax rate," he wrote.

The provision would differentiate Perry's offer with that of businessman Herman Cain, one of his major rivals in Republican nomination race. Cain has offered a so-called "9-9-9" tax proposal, which calls for replacing the current tax code with a nine percent tax on personal income, corporations and sales.

Cain's plan has been met with strong criticism from the left that it would benefit the upper-income Americans at the expense of the low-and-middle income earners.

To fend off liberals' criticism, Perry said his plan would preserve mortgage interest, charitable and state and local tax exemptions for families earning less than 500,000 U.S. dollars annually, and increase the standard deduction to 12,500 dollars for individuals and dependents.

"This simple 20 percent flat tax will allow Americans to file their taxes on a postcard, saving up to 483 billion dollars in compliance costs," he wrote.

Apart from tax reform, Perry also provided proposals on reducing debt and deficit, with a goal of balancing the federal budget by 2020.

The plan would cap federal spending at 18 percent of gross domestic product, ban earmarks and future bailouts, and pass a balanced budget amendment to the Constitution. It would also seek to repeal major legislative achievements of the Obama administration including healthcare and financial regulation reform laws.

With respect to entitlement reform, the plan would give younger workers the option to own their social security contributions through personal retirement accounts.

Editor:Wang Xiaomei |Source: Xinhua

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