Rand Paul, a very forthright Christian Republican, has a lot of interesting viewpoints on how to “fix” our economy. Paul wants many things to change and one of those things is the tax rate.
We all know how annoying it is when tax time rolls around. We have to bug our employers to send out the W-2 sooner or later and then download Tax Plus in order to punch in some numbers that you think make sense. Eventually you get a mere couple hundred dollars back, even though you’re pretty sure you deserve more.
That’s where Rand Paul’s idea about taxes sounds pretty nice. Paul’s new and improved tax revision includes a 14.5% tax for everyone for all income an individual or business makes. He would still incorporate dependents though, 5,000 for each kid and a 15,000 automatic deduction upon filing. So, if a student is making 7,000 dollars a year flipping burgers, they won’t have to pay taxes.
According to Tax Foundation, this plan has its pluses and negatives. The tax plan would end in a 1 trillion dollar loss in revenue over 10 years. But, the 14.5% tax would, according to Tax Foundation, “increase the incentive to work, and result in 1.5 percent additional private business hours of work, which is the same as 1.4 million full time jobs.” The benefits and downfalls of a flat tax rate can be explained by CU economic instructor, William Ridley.
“Just the act of simplifying the tax code on its own would generate enormous real gains for the economy, and removing distortionary excise taxes and tariffs as the proposal would do is something that I’m generally in favor of. But, Paul’s flat tax is inherently regressive and would shift a larger portion of the tax burden onto lower and middle-income workers, which isn’t something I (or most Americans) would favor,” Ridley said. But how would this affect our budget in general? Lorraine Kirkland, a local accounting firm business owner, has many strong opinions about the idea of a flat tax.
“Experts have stated for years that flat tax plans would fail to raise enough revenue to fund our government by between $1 and $15 trillion over the next decade. Rand Paul says he would counter the lost revenue by making big spending cuts. Where will those cuts be made? I suspect that Social Security, Medicare and education will take the brunt of it,” Kirkland said.
So while Rand’s idea seems to make taxes less complicated, it could lead to many problems within our government. It may be a great idea for people that make less than 15 grand a year, but many families and businesses may be negatively impacted by it.
Contact CU Independent staff writer Maddie Toretto at madison.toretto@colorado.edu
