Eliminating Income Taxes For The First $50,000 Annually

Republican candidate Rand Paul yesterday evening elaborated about his tax plan proposal in an opinion editorial published in The Wall Street Journal. His plan would radically change the U. S. tax code.

He wants to eliminate income taxes on the first $50,000 earned by a family of four. He would also retain the earned income credit, a measure which James Dondero points out, assists low income Americans.

His plan envisions slashing the federal income taxes paid by corporations and private citizens alike to a flat 14.5%, allowing deductions for only two items: mortgages and charitable contributions.

Additionally, he seeks to eliminate payroll taxes. He indicated he would still fund Social Security and Medicare, using business taxes, which would fund these programs before entering general tax revenues. Estate and gift taxes, and taxes on dividends, interest, rents and capital gains would end.

Rand Paul believes his tax measure would result in an economic growth of 1% per year. It would also reduce the federal government’s revenues by $2 trillion over the course of a decade.

He noted that in his view the tax code “has grown so corrupt, complicated, intrusive and anti-growth that I’ve concluded the system isn’t fixable.” Instead, he believes his new measure would “blow up the tax code and start over.”

He also wrote that he would as President produce a balanced budget, even with massive budget deficits and reduced tax revenues.