Perry Commits To Debates
October 30, 2011 by staff
Perry Commits To Debates, Perhaps the flat tax, that old man convicted of the presidential candidates, has been stripped of its status as weird. The notion of ditches the complicated tax code for a single rate suddenly sxy in the election campaign.
Republican presidential candidate Herman Cain used a flat tax proposal to appear on the head of the race for the GOP nomination. Texas Gov. Rick Perry, said this week with a flat tax plan of his own.
The attractiveness of a flat tax is evident to any CPA who has not tried to make sense of the impenetrable language and tortured logic of an IRS form – and then came a cracked a beer or ibuprofen to relieve headache.
“Central to my plan is to give all Americans the option of throwing 3 million words of current tax code – and, I might add, the cost of complying with the tax code,” Perry said Tuesday when he announced his plan .
Perry said the payment of Uncle Sam in his tax plan 20 percent of which require only a postcard. Fill in how much you earned, then subtract the mortgage interest, state and local taxes, charitable donations and capital gains and dividends.
Multiply by 0.2 to complete the amount you owe. There TurboTax software to buy, not to accumulate the bills do not pay tax preparer.
No matter that these proposals have not been sold well in the past. Flat tax plans were advocated by Democratic presidential candidate Jerry Brown in 1992 and by Republican Steve Forbes in 1996 and 2000. Flamed campaigns, but Cain and Perry have made central flat tax proposals of their presidential campaigns.
“This reflects the popular discontent with the current tax system,” said William Shughart, professor of economics at the University of Utah and member of The Independent Institute, a free market thinking. “Mr. Cain and Governor Perry are responding to public outrage.”
However, tax experts say the picture painted by Perry amazingly simple it is pure fantasy.
For starters, the “postcard” Perry waved while announcing his plan was actually one-half inch by 11 inch page folded in half 8.
Perry’s plan would allow taxpayers to exempt income and 12,500, and 12,500 more for each dependent. Its form includes space for tax deductions for mortgage interest, state and local grants and investment income.
Perry’s one-page form is certainly simpler than the IRS ream of forms, but is a bit much to put on a postcard.
“Maybe it’s a great post,” joked Mr. Susswein, managing director of the national accounting firm RSM McGladrey.
Proposal leads to another wrinkle Perry not so simple: He had offered a choice between paying the flat tax or the payment of what you owe under the current progressive tax scale. That means you still need to complete a complicated tax return to determine which tax plan is the best option.
“If you have to do the calculation to make the decision, the amount of simplicity are you?” Susswein said.
Taking all this into consideration, and the promise of Perry back easy to complete tax amounts to “a gross oversimplification,” said Jeff Bolton, a CPA and partner of Daszkal Bolton in Boca Raton.
“When you get past, Rick Perry, holding the card, I do not know how they do that,” he said.
Bolton is not the only observer to pan Perry’s plan.
“It just seems like political pandering at its worst,” said Leonard Burman, a former Treasury Department official who now teaches at Syracuse University. “It seems like a serious policy proposal.”
If Perry’s plan were to pass, would be a boon for wealthy taxpayers, who pay a maximum tax rate of 35 percent of income above and 379,150. It also would end the capital gains.
“There are two things we can say with certainty: it will be lower income and be a great benefit for the rich,” said Roberton Williams, a researcher at the nonpartisan Urban-Brookings Tax Policy Center.
The Perry Republican rival Cain promotes a 9-9-9 plan that would impose a fixed tax of 9 percent, a corporate tax rate of 9 percent and a tax of 9 percent of domestic sales in the higher state and local sales. Critics of the plan say that Cain would cut taxes for the rich and raising them in poor and middle class.
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