Newt’s ‘mind boggling’ tax plan
In the Republican bidding war to give away the biggest tax breaks to the rich, Newt Gingrich’s plan stands out for its sheer mind-numbing wrongness and impossibility. If actually implemented it would explode the already huge budget deficit. He knows it can’t happen, but the Tea Party loves it.
NEW YORK (CNNMoney) — Every Republican presidential hopeful has a plan to cut taxes.
But one candidate’s plan has been described as so aggressive that it would blow a hole in the federal budget, lead to huge deficits and give the richest Americans a gigantic tax break.
That candidate is current frontrunner Newt Gingrich.
According a new analysis, Gingrich’s tax plan would reduce government revenue by a staggering $1.3 trillion — or 35% — in 2015, the first year the plan could be fully implemented.
“It’s mind boggling. It’s a very large tax cut,” said Roberton Williams, a senior fellow at the non-partisan Tax Policy Center, which performed the analysis.
What would Gingrich’s plan do?
Gingrich wants to add to the current tax code by putting an optional 15% flat tax on income in place, with a $12,000 per-person deduction. And Gingrich would like to eliminate the estate and capital gains taxes.
For businesses, Gingrich wants to reduce the corporate tax rate from 35% to 12.5% — a move that would take the rate from one of the highest in the industrialized world to one of the lowest.
All those tax cuts mean the federal government would take in much less money. In order to balance the budget — or get even remotely close — government spending would have to be slashed by huge amounts.
But wait! I thought that Newt was against “radical right-wing social engineering”! So if he’s not for big, “radical” cuts to the budget, but he is for big radical tax cuts, that can only mean one thing: bigger deficits, more debt.