Republican presidential hopeful Newt Gingrich is the latest candidate to publicly tout the idea of a “flat tax.” Gingrich suggests giving individuals and business owners the option of filing their tax returns under the current rules, or choosing to pay a flat, 15 percent income tax.
“In September of 1983 because Reagan cut taxes, deregulated, strengthened American energy, and praised job creators, we added in one month 1.1 million jobs,” Gingrich said this past weekend.
Gingrich argues the tax form could be reduced to a single sheet of paper. After listing personal income, you’d subtract a standard deduction of up to $12,000 per adult, then deduct any charitable contributions and mortgage interest. That would be your taxable income, which would be taxed at a rate of up to 15 percent. The right kind of tax reform, coupled with regulatory reform, would help “ensure” long-term economic recovery in America, according to Gingrich.
“It’s doable. We can do it. It’s not magic,” Gingrich said. “But it does take courage (and) the right principles.”
Gingrich is campaigning in eastern Iowa today. Gingrich wrote an editorial in The Quad City Times arguing an “optional flat tax” could save American taxpayers $400 billion a year on the costs of tax preparation and record-keeping.
Republican presidential candidate Rick Perry already has signaled that he will embrace the “flat tax” in a speech tomorrow in South Carolina. Competitor Michele Bachmann talked about abolishing the tax code and having a “flatter, simpler, fairer” income tax this weekend as well. Herman Cain, the former Godfather’s Pizza executive who has surged into the leading position in some national presidential preference polls, has proposed a “9-9-9” tax plan — a nine percent income tax, a nine percent corporate income tax and a new, nine percent national sales tax.