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 The Kentucky senator's plan, which he describes in a Wall Street
Journal's opinion piece being published on Thursday, would establish
a 14.5 percent flat-rate tax applied equally to all personal income,
including wages, salaries, dividends, capital gains, rents and
interest.
All deductions except for a mortgage and charities would be
eliminated under the proposal. Paul said the first $50,000 of income
for a family of four would not be taxed and that for low-income
working families, the plan would retain the earned-income tax
credit.
"My tax plan would blow up the tax code and start over," Paul wrote.
His proposal also would eliminate the payroll tax on workers and
several federal taxes including gift and estate taxes, telephone
taxes and all duties and tariffs. He said he would also apply a uniform 14.5 percent business-activity
tax on all companies, down from as high as nearly 40 percent for
small businesses and 35 percent for corporations.
"The immediate question everyone asks is: Won’t this 14.5 percent
tax plan blow a massive hole in the budget deficit? As a senator, I
have proposed balanced budgets and I pledge to balance the budget as
president," Paul wrote.
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The Journal reported that Paul said his plan would cut the
government’s tax take by more than $2 trillion over 10 years, or at
least 5 percent, based on congressional revenue estimates for 2016
to 2025. It also would require major spending cuts to avoid adding
to deficits, the Journal said.
Paul wrote that the current U.S. tax code "has grown so corrupt,
complicated, intrusive and anti-growth that I’ve concluded the
system isn’t fixable."
(Reporting by Will Dunham; Editing by Peter Cooney)
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