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Perry’s Tax Plan Would be a Boon for the Wealthy, Study Says

Steven Thomma
McClatchy / News Report
Published: Tuesday 1 November 2011
Rick Perry’s proposed tax plan would give wealthier Americans a big break according to a study.
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Rick Perry's proposed optional flat tax would be a windfall for wealthier Americans, giving millionaires an average tax cut of $637,418, according to an analysis by the nonpartisan Tax Policy Research Center released Monday.

While the tax cuts would be greatest at the top of the income scale, Perry's proposal would give all taxpayers at least some tax cut, according to the analysis. Those making less than $10,000, for example, would get an average tax cut of $28.

The largesse comes with a cost, however. The center estimates the Perry plan would mean $995 billion less for the federal government in 2015 — a shortfall that could well be added to the annual deficit and the federal debt.

"The Perry plan would reduce federal tax revenues dramatically," said the Tax Policy Research Center.

The analysis is the first independent look at the plan from the Texas governor, one of several flat tax and tax overhaul proposals being offered by candidates for the 2012 Republican presidential nomination.

Notably, Perry's plan would offer greater tax cuts to the wealthiest Americans than the "9-9-9" plan of rival Herman Cain. But Perry's blueprint also would give everyone a cut, while Cain's initial plan would raise taxes on everyone making less than $200,000.

The impact of Perry's overall proposal, according to the center:

  • Those making less than $10,000 would get an average annual tax cut of $28;
  • Between $10,000 and $20,000, an average tax cut of $97;
  • Between $20,000 and $30,000, an average tax cut of $209;
  • Between $30,000 and $40,000, an average tax cut of $460;
  • Between $40,000 and $50,000, an average tax cut of $789;
  • Between $50,000 and $75,000, an average tax cut of $1,773;
  • Between $75,000 and $100,000, an average tax cut of $3,324;
  • Between $100,000 and $200,000, an average tax cut of $7,254;
  • Between $200,000 and $500,000, an average tax cut of $28,504
  • Between $500,000 and $1 million, an average tax cut of $97,967;
  • More than $1 million, an average tax cut of $637,418.

Perry proposes two systems.

In one, anyone would have the right to use the current tax system, which presumably guards against Cain-like tax increases.

In the second, Perry would allow people to pay 20 percent of all their income AFTER they deduct $12,500 per person, charitable contributions and state and local taxes.

He'd phase out the deductions for incomes above $500,000. But he'd also add in other tax cuts for wealthier households by eliminating taxes on long-term capital gains and some dividends, and repealing the federal estate tax levied on the richest families in the country.

Based on data supplied by Perry's campaign and its own analysis by John Dunham Associates, the Tax Policy Research Center concluded that Perry's plan would let the Bush tax cuts expire as scheduled at the end of 2012, in favor of the new system.

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ABOUT Steven Thomma

Steven Thomma covers the White House, his second assignment there since coming to Washington in 1987. He joined what was then the Knight-Ridder Washington bureau as a regional reporter for the St. Paul Pioneer Press and became the bureau's National Political Correspondent in 1994. He was assigned to cover the White House for the first time in 1997 and was named Chief Political Correspondent in 2001. He assumed his current White House duties in November 2008. He received the Aldo Beckman Award for distinguished White House coverage for his campaign work in 2000, and the National Press Club's award for best regional reporting in 1994. Before coming to Washington, he worked for the Pioneer Press in Minnesota, the Fort Wayne Journal-Gazette in Indiana and City News Bureau in Chicago.

Don't foregt too that Matthew

Don't foregt too that Matthew continued to follow Jesus as his disciple, leaving his tax collecting practice behind to follow him. It is true that we are in this world, but we are called to be not Of this world. When the pharisees bring to Jesus the woman caught in adultery with stones to kill her, Jesus disarms them, and with kind words calls the woman to go and sin no more.

Most of the top 1% pay little

Most of the top 1% pay little or taxes. The 99% pay most of them. Only one in 3 corporations pay any taxes at all - they pad their expenses by giving their multi-millionaire CEO's up to $100 million in salary, bonuses and stock, which they can write off to show little revenue. Most of them pay their CEO's more money than they pay in income taxes. Or - they hide their cash off-shore. What a great country we have! Many of our glorious leaders are just as bad - they give themselves raises, pay no social security taxes, and retire after a year or so richer than god.

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