Rick Perry Outlines New Tax, Social Security Ideas

Hoping to gain ground on his rivals Mitt Romney and Herman Cain who are currently ahead of him in the polls, Republican presidential hopeful Rick Perry laid out an economic plan that makes big changes to the tax code and Social Security. Perry said it was a “bold reform needed to jolt this economy out of its doldrums.”

On the tax front, Perry proposed an “either-or” system. You could either opt to pay your income taxes as they currently are or you can pay a 20 percent flat tax. The reaction to his tax suggestion was less than warm. Economists predict it would reduce federal revenue, essentially acting as a big tax cut for the wealthiest taxpayers.

On the Social Security front, Perry proposes a mix of changes that we have seen before. There would be no taxes on Social Security benefits. For those currently receiving retirement benefits or about to receive them, benefits would not change, but younger workers would be able to invest their contributions in personal retirement accounts similar to IRAs. Perry would also raise the retirement age since, as he says, American workers are now living longer. Additionally, Perry would forbid the federal government from using Social Security trust fund money for other government programs (a sort of 0 percent IOU that we discussed in a recent post that makes it hard for the trust fund to earn a return and grow).

Which parts of Perry’s proposals do you support and which do you oppose?  What do you think the ramifications might be of his proposals?

Troutman & Troutman, P.C. – Tulsa Social Security disability lawyers

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