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The essence of plan is:
"Cut, Balance and Grow" plan to scrap the current tax code, lower and simplify tax rates, cut spending and balance the federal budget, reform entitlements, and grow jobs and economic opportunity.
Doesn't make sense. He wants to simplify the tax code, yet he says the taxpayer will have a choice of the 20% Flat Tax OR the Current Tax Rate. So don't they have to first figure out the current rate, and THEN decide if it is better than the 20%? How's that simplify - it just takes what we have now & adds another step to it.
A 20% Flat Tax will end up raising taxes on many low & middle income people, while slashing taxes on the wealthy individuals. Perry says that by lowering the taxes on the wealthy in this plan, it will allow them to create jobs.
HOW?
What percentage of the wealthy are business owners? Many many of them are stock brokers, dentists, doctors, athletes, lawyers, etc. - professional people who make barrels of money but do not create jobs. Many of those who Are business owners do not fall into the upper personal income tax brackets - purposely. Their money is in the business. And if those taxes are lowered, yes, it can lead to job production. OR - would it just lead to keeping the money. How about if the taxes on business are lowered, they MUST use the money "saved" to add jobs?
What percentage of the wealthy are business owners? Many many of them are stock brokers, dentists, doctors, athletes, lawyers, etc. - professional people who make barrels of money but do not create jobs.
All the professionals you listed above are employers. You might not see they are, but they do hire people.
For examples:
stock brokers - they are sales person, but who is doing their paperwork?
dentists/doctors/lawyers - against, they hire people too. they are not 1 man team.
Athletes - yes, they do hire people.
Just because they don't create 100s of jobs, it doesn't meant they are not creating jobs. You have to look at the bigger picture.
Look at Apple, how many jobs did they created? If you just look at Apple employees, they have around 50,000. But what about all those jobs that were created because of Apple's products? Did you look at how much accessories are being sold in eBay for Apple? Those are jobs created indirectly.
Tax is a problem, but not the biggest problem. The biggest problem is too much regulations. Regulations created to product mega corporations who has the case to lobby. These regulations are here to protect these corporations from competitions from the little guys.
If you have to get permission to hire someone to expand your business, then we have a big problem.
All the professionals you listed above are employers. You might not see they are, but they do hire people.
For examples:
stock brokers - they are sales person, but who is doing their paperwork?
dentists/doctors/lawyers - against, they hire people too. they are not 1 man team.
Athletes - yes, they do hire people.
Just because they don't create 100s of jobs, it doesn't meant they are not creating jobs. You have to look at the bigger picture.
Look at Apple, how many jobs did they created? If you just look at Apple employees, they have around 50,000. But what about all those jobs that were created because of Apple's products? Did you look at how much accessories are being sold in eBay for Apple? Those are jobs created indirectly.
Tax is a problem, but not the biggest problem. The biggest problem is too much regulations. Regulations created to product mega corporations who has the case to lobby. These regulations are here to protect these corporations from competitions from the little guys.
If you have to get permission to hire someone to expand your business, then we have a big problem.
Agree with you - these types to some extent Do hire people. But a broker, for example, may hire a secretary or assistants, but is it the broker, an employee of let's say GOldman Sachs, or is it Goldman Sachs that does the hiring? Who needs the incentive to hire - it's the large companies.
Or a Trial LAwyer - sure he'll hire a few associates & staff, but he's probably Cost more jobs than he's created.
And you're correct that tax is not the biggest problem. I don't think it is regulation either (I once chaired a roundtable session on how Regulation can HELP businesses - the panel consisted of marketing, regulatory & financial people). All of these are factors. The biggest problem is that when incentives are given - for example, tax advantages, or regulatory changes, the corporations still need to want to (or to be made to) manufacture in the U.S. instead of in a country where the wages are cents per hour. Do the R&D here, get tax breaks for developing a product, get patent protection here, set up an initial production line here, get the kinks out from the top scientists & engineers, but then they go & replicate the production in a Third World country and the costs there make it impossible to compete with US wages - not even counting Union scale wages - even Minimum wages.
The Corporate management wants to be here, because the Personal Tax rates in the US are so low compared to most of the World. But they want to manufacture overseas, where the Biz taxes are also lower.
Thus The Problem - how to get these jobs back into the USA.
OR - Do we just throw up our hands, say this country will never again be a manufacturing country, and develop a robust service industry?
I am not sure this is going to do for him what they hope it will.
With his recent birther remarks, public gun-huggin', and incoherent tax "plan", Perry is reacting to his plummiting poll numbers by doubling down on "stupid", hoping it will appeal to the GOP base.
The Corporate management wants to be here, because the Personal Tax rates in the US are so low compared to most of the World. But they want to manufacture overseas, where the Biz taxes are also lower.
Thus The Problem - how to get these jobs back into the USA.
OR - Do we just throw up our hands, say this country will never again be a manufacturing country, and develop a robust service industry?
Food For Thought.
I don't know what tax you referring to, but corporate tax in USA is not low. 35% is not low.
I haven't look into too much countries overseas, but for Hong Kong, Singapore that I did check, the rate is half of what we have here.
The reason producer refused to produce here is simple. Hiring people here is a liability. If I am employer and fired a non-performer who happened to be a woman (or fat, black, Hispanic, just fill in the blank), I probably going to get sue for discrimination.
I don't know what tax you referring to, but corporate tax in USA is not low. 35% is not low.
I haven't look into too much countries overseas, but for Hong Kong, Singapore that I did check, the rate is half of what we have here.
The reason producer refused to produce here is simple. Hiring people here is a liability. If I am employer and fired a non-performer who happened to be a woman (or fat, black, Hispanic, just fill in the blank), I probably going to get sue for discrimination.
I said the "PERSONAL tax rates" - then I pointed out that Corporate rates are higher here.
But the US is a great place for Execs to shift their Personal income to from overseas since it is taxed less.
I have not looked at every country, but I think it would be safe to assume that those countries with relatively high corporate tax rates have low personal income tax rates, and vice-versa. Every country has to get the money somewhere.
Agree with you - these types to some extent Do hire people. But a broker, for example, may hire a secretary or assistants, but is it the broker, an employee of let's say GOldman Sachs, or is it Goldman Sachs that does the hiring? Who needs the incentive to hire - it's the large companies.
Or a Trial LAwyer - sure he'll hire a few associates & staff, but he's probably Cost more jobs than he's created.
And you're correct that tax is not the biggest problem. I don't think it is regulation either (I once chaired a roundtable session on how Regulation can HELP businesses - the panel consisted of marketing, regulatory & financial people). All of these are factors. The biggest problem is that when incentives are given - for example, tax advantages, or regulatory changes, the corporations still need to want to (or to be made to) manufacture in the U.S. instead of in a country where the wages are cents per hour. Do the R&D here, get tax breaks for developing a product, get patent protection here, set up an initial production line here, get the kinks out from the top scientists & engineers, but then they go & replicate the production in a Third World country and the costs there make it impossible to compete with US wages - not even counting Union scale wages - even Minimum wages.
The Corporate management wants to be here, because the Personal Tax rates in the US are so low compared to most of the World. But they want to manufacture overseas, where the Biz taxes are also lower.
Thus The Problem - how to get these jobs back into the USA.
OR - Do we just throw up our hands, say this country will never again be a manufacturing country, and develop a robust service industry?
Food For Thought.
the problem is, and has been, allowing companies to move offshore and then SHIP THOSE GOODS HOME without penalty. it is one thing to go to another country, set up shop, and produce goods for that country-providing jobs in that country and earning money for yourself while doing so. there would also be nothing wrong with an investor coming into the US, setting up shop, providing american labor, selling to americans and deriving a profit while doing so, or vice-versa. it really can be a win-win for everyone.
the problem is that we allow businesses to make the goods overseas and then bring them home to sell, thereby totally destroying the labor part of the equation.
that is totally wrong, a total abuse of the system, and results in a reduced standard of living for americans.
and, of course, the mess that wall street has become. i saw this today:
"Citigroup put together a CDO (a debt obligation) in which it selected "assets" to put into the transaction specifically for their crappiness. That is, they chose assets that they expected would decline in value.
The company then shorted the instrument it created, a position that would lose money if the CDO performed as expected and marketed to investors. They could only make money if the investor lost their shirt.
They did not disclose either their selection of the assets in the CDO or that they took the short to the people who were buying it!"
They're fined $285 million. FINED!!!!!
"This makes stealing a simple business proposition: Since you will not get caught all of the time, there is no reason not to steal. Any time you do not get caught you get to keep all the loot. When you get caught you negotiate to return some of the loot.
AND WE WONDER WHY INSTITUTIONS ENGAGE IN THIS SORT OF BLATANT RIPOFF?
Ps: Oh yeah, there's this pesky statute of limitations problem too. Anyone note the dates? Just draw it out until you can't prosecute - on purpose. This is nothing more or less than an organized looting operation with the full participation of the government in stealing from the victims." (backwards evolution)
It really isn't a flat tax if you can 'opt out' and you wish to pay under the same rate you do now.
For the 50% or so that don't pay any federal income tax, they'll opt to do the status quo, and those who pay more than 20% will opt to drop to the new 20% flat rate.
I am hearing his plan right now on CNBC.
He is calling for 20% and a standard deduction of $12,500 per person.
My income is exactly, $12,720. If social security is not fully non taxable, under Perry's plan, I'd pay taxes on $220.
Not much, but it was rather humorous, that his standard deduction came in, so close to my income.
He says if you want to keep filing the long form you can.
Again this is amusing to my situation.
My Schedule D-1 is over 30 pages and takes over 30 hours to complete.
So, if I keep the current tax code, I save tax on $220, but I have to fill out forms for over 30 hours.
If I take Perry's plan, I skip the forms, but pay taxes on $220.
Flat tax is nothing new, it has been around since the late 1990's.
It won't get him the White House any more than someone else, who can offer the same type plan, and maybe even a lower tax rate.
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