Rick Perry says he'll propose a flat tax
Texas Gov. Rick Perry speaks during the Republican presidential debate airing on CNN in Last Vegas. (Oct. 18, 2011) Credit: Getty Images
The flat tax has been an elusive dream of conservative Republicans for decades.
In a speech before the Western Republican Leadership Conference in Las Vegas, Perry previewed the broad outlines of a tax plan that he said he will soon present. Among its features, he promised, will be spending cuts, entitlement reform and a flat tax.
What is a flat tax? Just what it sounds like: One tax rate for all Americans. Right now, income taxes are progressive, with the rate increasing with each income bracket. A flat tax would mean an end to complicated forms, itemized deductions, credits and other loopholes.
Most flat-tax plans still have some deductions, however. For individuals, there's a deduction based on family size. For businesses, there's a deduction for wages and other costs. After those deductions, everyone would pay the same rate.
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