Perry wants flat tax with some deductions

GRAY COURT, S.C. — Republican presidential candidate Rick Perry proposed a sweeping economic plan Tuesday that includes a flat tax proposal, private retirement accounts for Social Security, a lower corporate tax rate and reforms aimed at keeping Medicare solvent.

In a pitch to right-wing conservatives, the Texas governor outlined a proposal he calls "Cut, Balance and Grow" that he says is bolder and more aggressive than what his Republican rivals or President Barack Obama would do.

"America is under a crushing burden of debt, and the president simply offers larger deficits and the politics of class division," Perry said. "Others simply offer microwaved plans with warmed-over reforms based on current ingredients."

In his speech, Perry outlined a broad plan that would make fundamental changes to the tax code and to the nation's entitlement programs.

After weeks of calling Social Security a "Ponzi scheme," he offered five concrete principles for reforming the program. Perry said he wants to keep benefits intact for current retirees, but allow younger workers to choose to put their income into private accounts instead. He wants to allow states and local governments to opt out of the federal program and invest in different funds instead. And he wants to raise the retirement age for younger workers.

Perry also wants to make major changes to Medicare. His plan would allow Americans to receive a payment or a credit for the purchase of health insurance instead of the direct benefits provided through the current program. He also would gradually raise the Medicare eligibility age and pay people benefits based on their income levels.

Perry's plan sets a flat 20 percent income tax rate, but also gives taxpayers the option of sticking with their current rate. He also would maintain popular deductions for families making less than $500,000 a year and end taxes on Social Security benefits. Perry would end corporate loopholes and lower the general corporate tax rate to 20 percent.

Many elements of Perry's plan are controversial — and others have tried and failed to pass them. President George W. Bush tried to add private accounts to Social Security, but the proposal was widely condemned and did not pass.

"I am not naive. I know this idea will be attacked," Perry said of the proposal.

President Barack Obama's campaign immediately criticized Perry's plan as hurtful to middle-class Americans.

Share This Story