(Bloomberg News) Republican presidential candidate Rick Perry proposed a tax overhaul that would cut corporate rates and give individuals the option of paying a 20 percent flat tax on their income, fleshing out an economic plan he is using to try to distinguish himself from his rivals.
"Taxes will be cut across all income groups in America," Perry said. He displayed an individual income tax form not much larger than a postcard that he said taxpayers could use, as he detailed his ideas in a speech today in South Carolina.
"The net benefit will be more money in Americans' pockets, with greater investment in the private economy instead of the federal government," said the Texas governor, who chose the warehouse floor of ISO Poly Films, a plastics company in Gray Court, about 25 miles from Greenville, as his backdrop.
The proposal would lower the corporate tax rate to 20 percent from 35 percent and give multinational companies a temporary incentive to bring home foreign-earned income at a far lower rate of 5.25 percent.
Seeking to recapture momentum for his 2012 bid, Perry is trying to harness Americans' distaste for the complicated tax code and capitalize on enthusiasm -- evident in Herman Cain's surge in the polls as he promotes his 9-9-9 tax plan -- for major changes, particularly among the anti-government Tea Party movement.
'A Change Election'
Americans "aren't searching for a reshuffling of the status quo, which simply empowers the entrenched interests," Perry said. "This is a change election, and I offer a plan that changes the way that Washington does business."
Perry's plan calls for balancing the budget by 2020 and capping federal spending at 18 percent of gross domestic product. It includes changes to popular social programs that he said would end the "entitlement culture" in America and do away with what he called the "nanny state."
Those include raising the age at which future senior citizens become eligible for Social Security and Medicare; limiting future retirement benefits for younger people and letting them invest part of their payroll taxes in private accounts; and requiring wealthier seniors to pay more for Medicare services. Perry said state and local governments should be able to opt out of Social Security and let workers invest instead in state and local retirement programs.
10 Weeks To Iowa
Perry is seeking to recharge his campaign, which surged after he entered the race Aug. 13 yet lost steam following lackluster debate performances and scrutiny of his backing for a Texas law that allows the children of illegal immigrants to pay in-state tuition at state universities. Perry this week added campaign veterans and scheduled his first major ads in Iowa, with 10 weeks to go before voting begins there.