Libertarianish Republican Sen. Rand Paul of Kentucky has announced the outlines of an income tax plan that will, in his words, “blow up the tax code and start over.” In the Wall Street Journal, Paul writes:
I am announcing an over $2 trillion tax cut that would repeal the entire IRS tax code—more than 70,000 pages—and replace it with a low, broad-based tax of 14.5% on individuals and businesses. I would eliminate nearly every special-interest loophole. The plan also eliminates the payroll tax on workers and several federal taxes outright, including gift and estate taxes, telephone taxes, and all duties and tariffs. I call this “The Fair and Flat Tax.”
To paraphrase Matthew McConnaughey, all right, all right, all right. Then again, the details, which have not yet been released, really matter. Especially when, like all flat taxes, you start out immediately with exemptions, despite the whole idea of a flat tax being equally applied to all people and income, right?
All deductions except for a mortgage and charities would be eliminated. The first $50,000 of income for a family of four would not be taxed. For low-income working families, the plan would retain the earned-income tax credit.