Perry wants flat tax with some popular deductions

GRAY COURT, S.C. - October 25, 2011 (WPVI) -- Republican presidential candidate Rick Perry is rolling out an economic plan that includes a flat tax proposal, private retirement accounts for Social Security and a lower corporate tax rate.

The Texas governor on Tuesday was outlining a proposal he calls "Cut, Balance and Grow" that is aimed at creating jobs and fixing the struggling economy, voters' top concerns heading into the 2012 election. Perry's plan sets a flat 20 percent income tax rate, but also gives taxpayers the option of sticking with their current rate.

He would maintain popular deductions for families making less than $500,000 a year, and eliminate taxes on Social Security benefits.

His plan also drops the corporate tax rate to 20 percent, and eliminates taxes on qualified dividends and long-term capital gains.

Perry outlined the plan in a Wall Street Journal opinion piece early Tuesday and was set to speak about it later in the day. In an interview on CNBC, he dismissed suggestions that it would be a giveaway to the wealthy, saying, "I don't care about that."

Perry said he wants to give business people incentives to invest in their companies and start new ones. He said he rejects "this idea that we've got to have a tax system in this country where you take more away from those that have the ability to create jobs. ... What I'm interested in is getting America working."

The major policy rollout is a critical part of Perry's efforts to right a struggling campaign. It's an opportunity to demonstrate a heft and seriousness that wasn't on display during recent debates. And it sets Perry to the right of chief rival Mitt Romney, who wants to make less sweeping changes to the tax code.

The policy rollout comes as he prepares to start airing TV ads in Iowa and has hired a roster of experienced national campaign operatives to help him. Perry's chief adviser on the economic plan is former presidential candidate Steve Forbes, who proposed a 17 percent flat tax when he ran for president in 1996.

It's taken Perry about 2-1/2 months to put together an economic policy package, and he's had to attend the series of debates without his detailed proposal. Romney also has attacked him repeatedly for not having a plan. Romney released a 59-point jobs plan in early September, about three months after officially announcing his bid.

Perry's plan would make more dramatic changes than Romney's would. While Perry's plan includes the flat tax, Romney would lower rates on corporations and on savings and investment income for middle-class Americans.

Back in 1996, Romney criticized Forbes' flat tax plan as a "tax cut for fat cats." Perry said if Romney renews that criticism, "he ought to look in the mirror, I guess. I consider him to be a fat cat."

Perry chose South Carolina, where he announced he was running for president, to unveil the plan. The first-in-the-South primary state is critical to his path to the nomination, though he has fallen in the polls here just as he has dropped nationally.

He also planned a news conference in the state capital, Columbia, and a fundraiser at the home of former South Carolina GOP chairman Katon Dawson, his top South Carolina adviser.

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