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U.S. GOP candidate Perry unveils economic plan

10-26-2011 08:59 BJT

WASHINGTON, Oct. 25 (Xinhua) -- U.S. Republican presidential candidate Rick Perry on Tuesday formally unveiled his economic plan which includes an optional flat tax on individual income, a lower corporate tax rate and entitlement reforms.

The Texas governor delivered the proposal during a speech at a manufacturing company in Gray Court, South Carolina, shortly after outlining his plan in a Wall Street Journal op-ed.

"The goal of my Cut, Balance and Grow plan is to unleash job creation to address the current economic crisis, while generating a stable source of revenue to address our record deficit and put our fiscal house in order," Perry said of his proposal.

Central to his plan was an optional flat tax system that would allow taxpayers to choose to pay a 20 percent flat tax on their income or be levied under the current tax code, which is a progressive tax system with the top marginal tax rate at 35 percent.

The proposal would differentiate Perry's offer with that of businessman Herman Cain, one of his major rivals in the 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 dollars annually, and increase the standard deduction to 12,500 dollars for individuals and dependents.

"On the corporate tax side, I am offering equally bold reform," Perry said, adding that his plan "closes corporate loopholes, ends the special breaks for special interests, and stops the gravy train of lobbyists and tax lawyers at the Washington trough."

Under his plan, the top corporate tax rate would be lowered to 20 percent from 35 percent under current law. The plan would also shift the U.S. to a territorial tax system, which means companies pay the corporate tax in the country where income was earned, but aren't taxed a second time when that income is moved back into the U.S..

The governor also outlined his blueprint for reforming major entitlement programs including Social Security, Medicare and Medicaid.

He listed five principles to reform the Social Security, which includes protecting existing benefits for current retirees; ending the current pillaging of the Social Security Trust Fund by Washington politicians; allowing young workers to invest a portion of their payroll taxes into private accounts if they so choose; allowing state and local governments to opt out of the program; and raising the retirement age for younger workers.

Editor:Wang Xiaomei |Source: Xinhua

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