By Bryan Fischer
Follow me on Twitter: @BryanJFischer, on Facebook at “Focal Point”
Rick Perry’s tax, spending and entitlement reform plan just won him the White House. With his "Cut, Balance and Grow" plan, he will win the Republican nomination and vanquish Barack Obama next November.
It’s game over.
One sure sign that his flat tax proposal is a winner is that the other candidates are jumping on board with the “Me too!” mantra. Now of course Herman Cain was first on board the flat tax train, but he’s been modifying it on the fly (where did the “9-0-9” plan suddenly come from?), and the creation of a whole new tax pipeline to send taxpayer sludge to Washington, D.C. in the form of a national sales tax is and should be a non-starter for conservatives.
Perry’s plan, on the other hand, is a winner for the following reasons.
One, it’s predicated on choice, a precious commodity for freedom-loving Americans. You want a 20% flat tax rate, it’s yours. You don’t want it, nobody is going to make you take it. Perry’s 20% flat rate plan preserves mortgage interest, charitable and state and local tax exemptions for the vast majority of American families, and increases the standard deduction to $12,500 for individuals and dependents. You can fill out your tax return on a postcard.
And the death tax will be gone forever, freeing families to leave their entire inheritance to their children without Uncle Sam pilfering their wallets from the grave.
In other words, what’s not to like?
If you’re a younger worker and want out of the Social Security Ponzi scheme and want to put your money in an account with your name on it, knock yourself out. You want to stay in, and watch your benefits circle down the drain, your call.
So unlike Barack Obama’s MussoliniCare promise about health care, under the Perry plan, if you like your tax plan, you will in fact get to keep it. You like the alternative plan better, it’s yours, baby.
Two, the 20% corporate tax rate and the tax holiday for repatriated income will give predictability and stability to American business and bring $1.4 trillion of overseas money right back home to the USA where it belongs. Our corporate rate is the highest in the world now, even ahead of Japan, and this drives American investment overseas. And because overseas profits currently get taxed again if they’re brought home, there is a perverse and economy-debilitating incentive for American companies to keep their money overseas instead of bringing it home.
This change in our corporate tax structure will bring an immediate and life-saving jolt to the economy, and that $2 trillion to $3 trillion in cash that American companies have under the mattress right now will quickly be invested, expanding businesses, creating new jobs and raising wages. It’s a huge winner. You want a defibrillator for the American economy, the Perry plan is it.
Three, giving younger workers a choice between the doomed-to-fail Social Security program and a personalized retirement fund is a no-brainer. The first thing I will do, if Perry’s plan goes through - and it will, by popular demand - is counsel my grown children, both in their 20s, to get out of Social Security so fast it will give them a nosebleed. Millions of other 20 and 30 somethings will make the same intelligent choice. In fact, horror of horrors, if payroll taxes are going into personalized accounts instead of disappearing into the maw of government, in time people make actually start wondering why we need the government messing with retirement plans in the first place.
Seventeen million seniors will get a tax break since Perry will eliminate the tax on Social Security benefits. Eliminating the tax on dividends and capital gains will free billions of dollars to be invested instead of parked to avoid a tax bite.
His pledges to cap spending at 18% of GDP and balance the budget by 2020 are believable and doable. History shows it is simply impossible to generate more than about 18% of GDP in tax revenue to the federal government. Try to exceed that limit, and the economy begins to collapse back in on itself. Now 18% is too high, in my opinion, but it beats the heck out of the unsustainable 25.4% we’re at right now under Barack the Benevolent. (That is, benevolent with the money of children who have not yet been born.)
Balancing the budget is much more doable than people think. The Cato Institute has calculated that if federal spending were frozen at today’s levels, the budget would balance by 2017 due to growth in the economy and the consequent growth in tax receipts. Government spending could be allowed to actually increase by 1% a year, and the budget would still balance by 2019. If spending were allowed to grow at 2% a year, the budget would come into balance by 2021.
Balancing the federal budget can be done, and Perry will put us on glide path to get us there. He’ll start by freezing federal salaries and civilian hiring until the budget is balanced. That’ll give an incentive to federal workers to cooperate with a plan to get the budget in balance as quickly as humanly possible, because they won’t have a shot at a pay raise until that’s done.
Bottom line: as of today everybody in the field is playing for second place. And that includes Barack Obama.
(Unless otherwise noted, the opinions expressed are the author’s and do not necessarily reflect the views of the American Family Association or American Family Radio.)