January 7, 2016
Ben Carson has released his tax-reform plan–for a 14.9 percent flat tax plus a $100 minimum tax on everyone who makes less than the tax’s threshold level–and the Tax Foundation has scored it (that is, published an analysis of what it views as its likely effects on the economy and on federal revenue under certain assumptions). Dan Mitchell gives it a very positive review because it eliminates the double taxation of saving and simplifies the tax code. I like those features of the plan, too, to a point. But I see some weaknesses of the plan as well.
1) The Tax Foundation estimates that it would reduce federal revenues by $5.6 trillion over ten years unless it generates extra economic growth. Unless Carson pairs the plan with spending cuts in the same ballpark, I think this would both be and strike voters as reckless. (I think the same is true of many other Republican candidates’ plans.)
2) Because Carson does not eliminate or reform the payroll tax, his plan would leave middle-income earners paying a significantly higher marginal tax rate than high earners. I think that in a general election the Democrats would be able to inflict serious damage on any Republican running on a plan with this feature.
Read the full article at National Review Online: Ben Carson’s Flat Tax