POSTED: Tuesday, October 25, 2011 - 6:30pm
UPDATED: Tuesday, October 25, 2011 - 10:09pm
Governor Rick Perry unveiled his economic blueprint if elected, and it is in some ways, a fairly radical proposal.
As his poll numbers slide, the Governor is throwing an economic Hail Mary.
It is an ambitious plan.
The Governor is proposing first of all that the government spend no more than 18% of our Gross Domestic Product.
We haven’t done that in at least 40 years.
President Reagan averaged 22.4, Bush 41 was 22, Clinton 19.8, Bush 43 19.6 and Obama 24.4.
That will require big budget cuts, not outlined in the speech.
Taxes get interesting.
He proposes a flat income tax of 20%, but that’s optional. You can keep your current effective tax rate is you want.
Most will want to since the average taxpayer doesn’t even hit 20% until he earns a gross income of $360,000.
You can keep the mortgage interest, charitable and state income tax deductions, but will lose healthcare, college deductions.
He will drop the corporate income tax from 35% to 20%. But there will be a one-time amnesty of a 5% rate to get overseas dollars back into US banks.
The hope is the new capital will be used to spur growth and hiring.
It was tried in 2004, with minimal results, but Perry is convinced it will result in jobs.
Perry eliminates taxes on capital gains, dividends, inheritance and social security.
Social Security will also be optional for younger workers, and that will offer them a chance to invest privately, but there is no requirement that they do so.
It will also underfund the current program.
In his speech, the Governor admitted big budget cuts will be necessary, and his goal is a balanced budget by 2020.