Texas Gov. Rick Perry (R), in his quest to win the 2012 GOP presidential nomination, has released a so-called flat tax plan that would institute a 20 percent income tax rate on everyone (minus a few deductions), while completely eliminating all taxes on investment income.
This, of course, would mean a huge tax increase for those Americans who pay less than 20 percent now, and an immense tax cut for those at the top of the income scale. In fact, according to an analysis by the Tax Policy Center, Perry’s plan would cut taxes for millionaires by nearly $500,000 every year. Meanwhile, a family making $10,000-$20,000 would pay $215 more under the plan, while a family making $20,000-$30,000 would pay nearly $500 more.
During an interview yesterday with the editorial board of the Des Moines Register, Perry essentially admitted that this analysis is correct, affirming that a low-income person with no deductions would pay the full 20 percent while someone living entirely off of investments could conceivably pay nothing:
Q: For somebody who has a home and investments and all that, an income level to have all of that, gets those deductions, but a family that doesn’t then still pays 20 percent on their total income? And I’m describing a low-income family.
PERRY: Right. That is correct. [...]
Q: Talk about the difference in where people’s income comes from. The person who works, you know, punches the time clock, they would pay the 20 percent. The person who has the big nest egg from dad or grandpa, whose income derives from capital gains or dividends, would pay nothing?
PERRY: I have a hard time with nothing. I’m sure you could go find an individual or some small number of individuals that meet that characteristic. But again, I don’t think anybody’s going to be able to create a tax system that does not have somewhere an inequity.
When asked if his plan would give millions in tax breaks to the rich, Perry callously replied, “I don’t care about that.” A ThinkProgress analysis found that billionaire investor Warren Buffett could pay as little as 0.2 percent under Perry’s plan. At the same time, Perry not only wants to raise income taxes on lower- and middle-income families, but has come out against extending the expiring payroll tax cut, walloping working families with another $1,000 tax increase next year.