Yes increasing the tax base.. implementing the flat tax with zero exceptions, zero loopholes, and no salary floor
BUT that is only a start... because we have a spending problem... we have to reduce the spending and the size of government DRASTICALLY for ANYTHING to work in debt reduction
You suggest a flat tax that's all encompassing. At what rate would the tax be? Under Perry's plan, the middle and lower classes would have the option to stay with the current format, thus not lowering their tax or going to the fixed 20% and raising their taxes. And if a person changes from the old format to the new format, they are stuck in the new flat tax format forever.
The bottomloine of Perry's tax cut would be the middle clas and the poor would not see a tax cut but the wealthy would.
However, a majority of economists calculate that the revenues would not cover the cost of running government, let alone reduce the deficit, it would aldd to the deficit.
Here's an excerpt which discusses Perry's tax plan. It says some good things and addresses the bad things. Any economist will attest to that.
Rick Perry Tax Plan: What Do Economists Think of His Optional Flat Tax?
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Can Perry's Tax Plan Lead to a Balanced Budget?
That task becomes even more daunting with Perry's promises to balance the budget and cut spending to 18 percent of GDP by 2020, but Perry insists it is possible.
"It will be an extremely difficult task exacerbated by the current economic crisis and our need for significant tax cuts to spur growth," he wrote in a Wall Street Journal op-ed on Tuesday. "But that growth is what will get us to balance, if we are willing to make the hard decisions of cutting."
Those hard decisions could include slashing anything from education spending to military spending to popular entitlement programs like Social Security, Medicare and Medicaid.
Perry argues that after a few years, the economic growth resulting from his plan would more than make up for the lost revenue.
"Lower, flatter taxes could generate both more revenue than the current tax code and significantly more economic growth over time," the John Dunham and Associates analysis concluded. "With increasing demands on the federal government from growing entitlements, higher pension expenses and interest on the debt, it will be necessary to increase the size of the economy -- and the tax base -- in order to generate significantly higher revenues."
Reuters columnist James Pethokoukis made the same argument in a blog post for the American Enterprise Institute, a conservative think tank. "The numbers look better the further out you go as the Perry economy far outpaces the CBO economy long term," Pethokoukis wrote. "And even under the static score [not accounting for economic growth], revenues return to their long-term average."
But many tax experts -- even some who supported Perry's proposals overall -- said revenue neutrality was an important component of a sustainable tax plan.
"The argument is, well, this is going to grow the economy and create jobs, and that's fine. I think it will help business to have a simpler world and have a simpler understanding of the tax code and what's expected of them," Zerbe said. "But we all recognize we have to pay for things."
Questions Whether Taxes Cuts Will Pay for Themselves
Williams, from the Urban Institute, called Perry's estimates of economic growth unrealistically high. Tax cuts will lead to growth, he said, but not enough to make up for the lost revenue.
"They say the economy's going to grow so fast we'll have money coming out of our ears -- but I think economists generally agree that tax cuts will not pay for themselves," Williams said. "We do believe that simpler taxes and flatter taxes will cause the economy to grow faster, but not so much faster as to recoup all the tax losses. The estimates by the Perry campaign just aren't consistent with mainstream economics."
Rick Perry Tax Plan: What Do Economists Think of His Optional Flat Tax? - International Business Times
