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Presidential Issues: Taxes


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Busting the Flat Tax Fallacy

July 7, 2015

By Joseph Mitrani

Republican presidential candidate Rand Paul has proposed a 14.5 percent flat tax on all American individuals and businesses. He repeatedly claims his plan would "blow up the tax code" and "pull America out of the slow-growth rut of the past decade," underscoring the audacity of such a policy. He concludes with an assurance that the plan's execution will see the American economy roar. But the key to fiscal growth is not as easy as implementing a flat tax.

Paul's tax plan, as with many flat tax proposals, is not a pure flat tax. He includes a tax exemption for the first $50,000 of family income and the maintenance of mortgage and charity write-offs.

In addition, Paul proposes a 14.5 percent "business activity tax" that would operate much like a European Value Added Tax or VAT. Despite its widespread popularity among OECD nations, VATs serve as a pernicious form of taxation, harming American consumers through increased prices and broader tax bases...

Read the full article at the Manhattan Institute: Busting the Flat Tax Fallacy

Issue Categories : Rand Paul, Taxes