Republican Senator Rand Paul’s plan to overhaul the U.S. tax system calls for a 14.5 percent federal flat tax for consumers and companies, the elimination of almost all deductions and the abolition of several other levies.
“My tax plan would blow up the tax code and start over,” Paul, of Kentucky, wrote Thursday in the opinion section of the Wall Street Journal and discussed in a video on his presidential campaign website.
Paul said he would repeal the entire Internal Revenue Service tax code -- “more than 70,000 pages” -— and replace it with one broad-based tax rate of 14.5 percent on individuals and corporations.
Paul’s plan is one of the most detailed among his Republican rivals for the 2016 presidential nomination, who have also urged changing the tax code and reducing its complexity. Other candidates, including Texas Senator Ted Cruz, have called for a flat tax.
Paul would reduce the current corporate tax rates that can reach as high as 40 percent, he said. The plan would eliminate the gift tax, the estate tax, telephone taxes and all duties and tariffs. Paul also pledged to eliminate the payroll tax on workers, which has been used to fund Social Security and Medicare.
With the exception of charitable giving and mortgage interest, every tax deduction would be eliminated.
Over 10 years, it would reduce revenue to the U.S. Treasury by $2 trillion. With spending cuts and economic growth, the federal budget would be balanced, Paul said. He cited an analysis of the plan by the nonpartisan Tax Foundation research group that predicted a 10 percent growth in the gross domestic product and 1.4 million additional jobs over 10 years.