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A closer look at Gingrich’s ‘flat tax’ plan
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| Parent(s) |
Candidate
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| Contributor | RP |
| Last Edited | RP Nov 30, 2011 05:24pm |
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| Category | Analysis |
| Author | Suzy Khimm |
| Media | Newspaper - Washington Post |
| News Date | Tuesday, November 29, 2011 02:00:00 PM UTC0:0 |
| Description | Like Perry, Gingrich would give Americans the choice to be taxed under the current system or to opt into a “flat tax” alternative.
Gingrich one-ups Perry, however, and makes both individual and corporate tax rates even lower: The individual flat rate would be 15 percent, and the corporate rate would be just 12.5 percent — about a third of its current level of 35 percent. (Both rates would be 20 percent under Perry. By contrast, many Republicans have discussed lowering the corporate rate to around 25 percent.) Both would exempt capital gains income completely from taxation, but Gingrich would implement his change more quickly.
What’s more, Gingrich preserves deductions for corporations and rich individuals that Perry eliminates: He preserve deductions for charitable giving and mortgage interest to all Americans, whereas Perry only keeps them for families earning less than $500,000. Perry vows to eliminate all corporate tax deductions, while Gingrich would preserve them. As such, corporations and the richest Americans could stand to benefit even more under Gingrich’s plan than Perry’s.
Under Perry’s plan, those with more than a million in income would save $500,000 in taxes by 2015, due to a 60 percent drop in their tax rate, and those benefits would be even bigger under Gingrich. According to the Tax Policy Center, Perry’s plan would lower total projected government revenue by 27 percent—a $1 trillion loss in 2015 alone. Gingrich’s plan, accordingly, would result in even bigger revenue loss. |
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