Perry unveils comprehensive tax plan

In an effort to reignite his presidential campaign, Texas Gov. Rick Perry outlined his plan for a tax overhaul Tuesday, calling for a 20 percent "flat tax" on income and an 18 percent federal spending cap.

Writing in The Wall Street Journal, Perry described what he calls a "Cut, Balance and Grow" plan that would allow for privately held Social Security accounts, replace the current tax code with a flat-rate tax, slash corporate taxes down to 20 percent and eliminate all inheritance taxes.

"This simple 20 percent flat tax will allow Americans to file their taxes on a postcard, saving up to $483 billion in compliance costs," Perry writes. "By eliminating the dozens of carve-outs that make the current code so incomprehensible, we will renew incentives for entrepreneurial risk-taking and investment that creates jobs, inspires Americans to work hard and forms the foundation of a strong economy."

Perry adds that initially, taxpayers will have a choice between paying the flat tax or their current tax rate.

Under Perry's tax plan, Americans who earn less than $500,000 annually would continue to receive several current tax exemptions, and those receiving Social Security would no longer pay taxes on that income.

The plan also calls for a Balanced Budget Amendment to the Constitution--an idea Perry has long supported--although Perry says it will take a decade to eliminate the federal deficit.

"My plan freezes federal civilian hiring and salaries until the budget is balanced. And to fix the regulatory excess of the Obama administration and its predecessors, my plan puts an immediate moratorium on pending federal regulations and provides a full audit of all regulations passed since 2008 to determine their need, impact and effect on job creation," Perry writes.

Unlike Herman Cain's "9-9-9" plan, which replaces the current tax code with three 9 percent taxes on business, income and consumption, Perry's proposal does not include a national sales tax.

Read the entire plan here.

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