Gray Court, S.C. – Surrounded by barrels of film lining a South Carolina warehouse, Texas Gov. Rick Perry unveiled an economic plan he argued is the kind of “bold reform” needed to revive the economy. His plan includes an optional 20 percent personal income tax, lowering the corporate tax rate to 20 percent, and reforming entitlement programs.
“My plan doesn’t trim around the edges, and it doesn’t bow down to the established interests. But it’s the kind of bold reform needed to jolt this economy out of the doldrums, to renew American prosperity. And those who oppose it will wrap themselves in the cloak of the status quo,” Perry said Tuesday at ISO Poly Films, Inc, a plastics manufacturing company.
“Americans, though, they aren’t searching for a reshuffling of the status quo, which simply empowers the entrenched interests,” he said. “This is a change election, and I offer a plan that changes the way Washington that does business.”
Perry’s plan, called “Cut, Balance and Grow,” proposes a simplified tax code which offers an optional 20 percent personal income tax, allowing for people to fill out their taxes through a simple postcard. Taxpayers would have the choice to stay under the current tax code or opt for this new flat tax.
“The size of the current code, which is more than 72,000 pages, is represented by this pallet and its many reams of paper,” Perry said pointing to stacked reams of paper to the right of the stage. “The best representation of my plan is this post card, which taxpayers will be able to fill out to file their taxes.”
Perry’s team passed around an example of an individual income tax return postcard taxpayers could use to select the flat tax option.
The tax reforms in the plan also include a 20 percent corporate tax rate and eliminations of the inheritance, dividends and capital gains taxes along with ending taxes on Social Security income. Perry pledged to balance the budget by 2020 and vowed to work for a balanced budget amendment.
Perry stressed the burdens placed on business by current federal regulations and said he would put a freeze on any pending federal regulations along with starting a review of any regulations implemented since 2008.
He offered his most specific proposals yet on reforming entitlement programs, a topic he has drawn heat for throughout the campaign cycle after calling Social Security a “Ponzi scheme,” a word he has since wiped from his stump speeches.
“The flat tax will unleash growth. But growth is not enough. We must put a stop to this entitlement culture that risks the financial solvency of this country for future generations. The red flags are alarming,” Perry said.
Perry presented five proposals to fix Social Security, which include protecting benefits for current retirees while working with Congress to determine an age to grandfather those approaching retirement into the program. He would prevent Congress from using the Social Security Trust Fund, create private accounts for young workers, allow state and local governments to let employees to opt out of the federal program and pay into a locally run retirement programs, and raise the retirement age for younger workers.
“I am not naïve. I have an idea that this idea will be attacked,” Perry said. On Medicare, Perry recommended providing patients with greater flexibility to choose plans which fit their needs, gradually raising the age of Medicare eligibility, implementing a sliding scale for distributing Medicare benefits, and tackling waste and fraud in the program.
Perry’s plan restructures Medicaid by turning its administration over to the states. Perry touted his plan as a direct contrast to President Obama’s stimulus plan, arguing “It’s the kind of economic stimulus that President Obama could’ve achieved if he wasn’t so hell bent on passing government schemes that have failed American workers.”
The Texas governor said his plan is concise and distinct, noting that its length doesn’t compare to some of the more hefty plans proposed this campaign cycle. “It is not the length of a “War and Peace” novel, by the way, it’s relatively simple and straightforward but it is a very bold approach.”
Perry’s economic speech comes as the Texas governor tries to reinvigorate his campaign after sinking in the polls and stumbling through debates the past two months. Perry beefed up his Texas-dominated campaign staff by bringing in some national heavy hitters – including Joe Allbaugh, who ran George W. Bush’s 2000 presidential campaign.