Today I proposed the most sweeping reform to the American tax code in over a century: an over two trillion dollar tax cut that lowers taxes for every American and eliminates the current seven tax bracket structure.
Decades of entrenched corruption and over 70,000 pages of rules and regulations created a confused, torturous and unsalvageable tax code. I believe we needed to start over with a plan that’s simple, fair, and cuts taxes for all Americans.
This plan—the “Fair and Flat Tax Plan”—destroys an industry of lobbyists and lawyers gaming the system and makes everyone, rich and poor, file the same low tax rate of 14.5 percent on a one-page tax return.
In my plan, the first thing we’ll do is eliminate the most burdensome tax to workers, the FICA/workers tax. That means every single American will keep thousands of dollars more in their paycheck each year. The Fair and Flat Tax Plan also gets rid of the estate tax and all customs duties and tariffs. The plan retains the child and earned income tax credits and home mortgage and charitable deductions while eliminating all other tax credits and deductions.
For too long, politically connected cronies get taxpayer dollars by the hundreds of millions while poor families across America continue to suffer a disproportionate tax burden. The Fair and Flat Tax Plan ends corporate welfare by making all businesses accountable to the same 14.5 percent tax rate.
No more special tax breaks manipulated by privileged crony capitalists. No more billion dollar multi-national companies hiding income in tax shelters to pay zero while self-employed freelancers and workers dependent on tips for income face double-digit taxation. And unlike last year, never again will 29 of the CEOs of America’s 100 largest companies net more individual salary than their respective companies pay in total federal income tax.
Business benefit from how my plan will simplify deductions by getting rid of current expense depreciation schedules and making capital expenses deductible in the first year. By reducing the tax burden on businesses, we’d make America a competitive tax environment and start to welcome home iconic American brands—including Burger King, Bausch and Lomb, and Medtronic—that fled America’s high 39 percent corporate tax rate for a more competitive tax address.
This sweeping tax cut doesn’t abandon the critical goal of balancing the budget. I introduced a similar sized tax cut in 2014. This plan completely reduced the deficit and balanced the budget in five years, and still added $120 billion dollars to defense spending. It is entirely possible to cut taxes, protect our country, and balance the budget if we are willing to stand up to the Washington Machine.
According to an analysis by the Tax Foundation, my tax plan turns back the stagnation of the last decade and jump-starts the economy. It turns out that taking tax dollars from the Washington Machine and putting back with American families benefits our economy. The Tax Foundation estimates that in ten years my plan raises worker pay by 6 percent, increases the GDP by about 10 percent, and creates 1.4 million jobs.
The core principle of the Fair and Flat Tax Plan is to reward Americans working hard to achieve the American dream. I have a vision for an America where everyone, rich, poor, the working families in this room and families all across America have a level playing field. The Fair and Flat Tax Plan will reward Americans working hard to achieve their dreams.