Rand Paul proposes massive tax overhaul as platform plank

Sen. Ran Paul (R-Ky.) says he plans to make retooling the tax system, which he contends isn’t fixable in its current state, the key plank in his 2016 presidential platform. The lawmaker introduced Thursday a plan to “blow up the tax code and start over” with an across-the-board 14.5 percent tax on individuals and businesses.

In a piece for The Wall Street Journal this week, Paul said: “Here’s why we have to start over with the tax code. From 2001 until 2010, there were at least 4,430 changes to tax laws — an average of one ‘fix’ a day — always promising more fairness, more simplicity or more growth stimulants. And every year the Internal Revenue Code grows absurdly more incomprehensible, as if it were designed as a jobs program for accountants, IRS agents and tax attorneys.”

Paul’s plan would eliminate most special interest loopholes along with “payroll tax on workers and several federal taxes outright, including gift and estate taxes, telephone taxes, and all duties and tariffs.”

For a family of four, the first $50,000 of income would go untaxed and, according to Paul, low-income families would still receive the earned-income tax credit under the plan.

“I call this ‘The Fair and Flat Tax,’” the Kentucky lawmaker announced.

Paul believes that applying the 14.5 percent tax to all companies, down from current tax rates of about 40 percent for small businesses and 35 percent for corporations, will jump-start the nation’s economy and aid in job creation.

“We asked the experts at the nonpartisan Tax Foundation to estimate what this plan would mean for jobs, and whether we are raising enough money to fund the government. The analysis is positive news: The plan is an economic steroid injection,” Paul said. “Because the Fair and Flat Tax rewards work, saving, investment and small business creation, the Tax Foundation estimates that in 10 years it will increase gross domestic product by about 10%, and create at least 1.4 million new jobs.”

The new job possibilities are one part of Paul’s answer to critics who say that the flat tax rate will create a massive hole in the nation’s budget deficit. The second necessity will be some government spending cuts.

“[B]ecause the best way to balance the budget and pay down government debt is to put Americans back to work, my plan would actually reduce the national debt by trillions of dollars over time when combined with my package of spending cuts,” Paul wrote.

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