Rick Perry unveils flat tax proposal

Rick Perry revealed Wednesday that his economic plan will center around a flat tax, separating the Texas governor from his Republican presidential competition as he fights to regain momentum in the primary campaign.

Perry said during a speech at the Western Republican Leadership Conference in Las Vegas, Nev. that simplifying the tax code is a major tenet of his soon-to-be-released economic proposal.

"It starts with . . . scrapping the three million words of the current tax code [and] starting over with something simple: a flat tax," Perry said of his economic proposal. "I want to make the tax code so simple that even Timothy Geithner can file his taxes on time."

Steve Forbes, the wealthy publisher and tw0-time presidential candidate, has long advocated a flat tax and has been advising the Perry camp.

Forbes told the Wall Street Journal Wednesday he's "very, very excited" about Perry's plan. "What Perry is proposing is a radical simplification of the income tax code . . . . It's finally coming to pass."

A flat tax requires everyone to pay the same tax rate regardless of income and simplifies the tax system by ending variations caused by exemptions, deductions, and tax credits. The system currently in place is progressive-- high income earners pay higher rates. Critics of the flat tax say it would create an unfair tax burden on the middle and lower classes.

Perry announced several other general economic proposals: cutting spending, including reductions in entitlement outlays; balancing the federal budget; changing the spending culture in Washington, including ending earmarks--so called member items that lawmakers insert into spending bills just prior to their approval. Perry also argued for the elimination of EPA rules that he said harm job growth, together with a broader overhaul of the country's regulatory system. Perry said he has enacted successful versions of all these reforms in his home state, where he has earned nationwide attention for robust job growth amid the economic downturn.

GOP presidential hopefuls are all under pressure to convince voters they can turn around the economy via concrete solutions to create jobs and increase overall economic growth. Perry's flat-tax proposal separates him from opponents such as Mitt Romney and Herman Cain, who have unveiled economic plans based on different initiatives.

Businessman Cain's 9-9-9 plan is built on a 9 percent business, individual and national sales tax. Cain has gained signfiicant traction and national exposure for his catchy-sounding plan, which he says is designed to be understood by regular Americans.

Former Massachusetts Gov. Romney's 160-page economic plan includes 59 points, such as reductions in the corporate tax rate, and similar cuts in taxes on interest, dividends and capital gains for middle-class investors.

Perry plans to unveil his complete economic plan next week.

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