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U.S. Republican presidential candidates outline tax proposals

10-26-2011 17:31 BJT

WASHINGTON, Oct. 25 (Xinhua) -- With Texas Governor Rick Perry's economic proposal unveiled Tuesday, all three front-runners in the Republican presidential nomination race have made their economic messages clear to the public, with tax policy under the spotlight.

Tax proposals differ among former Massachusetts Governor Mitt Romney, businessman Herman Cain and Perry, with Cain and Perry calling for radical reform of the current federal tax code while Romney favors largely keeping the current tax structure in place.

PERRY: OPTIONAL FLAT TAX

Perry delivered his economic proposal during a speech at a manufacturing company in Gray Court, South Carolina.

"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," he said.

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 marginal rates ranging from 10 percent to 35 percent.

To fend off liberals' criticism that the plan would hurt the middle class, Perry said his plan would preserve mortgage interest, charitable, 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.

Perry's plan has met with strong criticism. The plan means that a flat tax system would run in parallel with the current one, which would lose the most-valued simplicity of a flat tax, critics said.

Furthermore, under the plan, upper-income households would be more inclined to opt for a flat tax to enjoy a lower rate, while the low- and middle-income earners would probably stay with the current tax code. As a result, the reform would only benefit the rich while maintaining the status quo for the middle class.


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