Republican presidential hopeful Rand Paul wrote Wednesday in the Wall Street Journal that he seeks to “blow up the tax code.” By that, he means that he wants to abolish the current federal revenue infrastructure and replace it with a 14.5% flat tax. WSJ reports:
The plan would eliminate payroll taxes on workers, as well as gift and estate taxes and all duties and tariffs. His flat tax would apply to all personal income, including wages, salaries, dividends, capital gains, rents and interest. It would exempt the first $50,000 of income for a family of four.
There are additional exemptions and credits Paul would include, amounting to a flat tax that’s not so flat after all. No doubt, if the plan were implemented, it would only be a matter of time before additional exemptions and credits started to creep in. Eventually, we’d end up with a system not unlike what we have now.
That said, there may be something to be said for pushing the reset button on the tax code. At least there would be some relief in the short to mid term.