Today, Rick Perry will release his “Cut, Balance and Grow” economic plan.
The details are yet to come, but from his initial press release, this is clearly a plan designed for the wealthiest Americans.
Perry would eliminate the estate tax that applies only to the wealthiest multi-million dollar estates. He would offer a choice between a quasi-flat tax of 20% (with deductions for mortgages, charities and state and local taxes) or the current code, essentially providing upper income taxpayers with a choice on how best to get a massive tax break. If Warren Buffett wants to insure billionaires never pay lower tax rates than their secretaries, Perry wants to guarantee they will never pay higher rates.
He’d allow multinationals to return the trillion dollars in profits that they have closeted abroad at a 5% tax rate, a truly shameless corporate giveaway. He’d lower corporate taxes to 20% immediately, while “phasing out” corporate loopholes – good luck with that.
Then he would blow a hole in Social Security, providing young workers with a choice for private accounts. Since under the current plan, young workers pay for the benefits their parents’ generation receives, this would starve Social Security of significant income just when the boomers are retiring. He does not say how he would replace what is likely to be a trillion dollar shortfall over the next thirty years.
But it will have to be by cutting benefits since he would put a lid on federal spending at 18% GDP (We currently spend about 24%, and it is impossible to imagine an effective government sustaining Medicare, Medicaid, and Social Security and bare bone essential services at less than 20%).
We’ll have to wait for the details to see how any of this adds up. Slashing taxes on the wealthy, and blowing a trillion dollar hole in the Social Security trust fund will run up deficits. Perry solves this by the magic elixir – a promise to pass a constitutional amendment to balance the budget, and a pledge that it will be balanced by 2020 through economic growth. He’ll achieve that growth by slashing taxes on the rich and corporations and eliminating health care reform, financial reform and gutting corporate accountability laws. He doesn’t explain why more money will get corporations sitting on over a trillion in profits to create jobs. Or why returning to the financial casino that blew up the economy will create the conditions for prosperity.
This looks like a replay of the Republican House budget on steroids. Republicans at least had the decency to leave Social Security alone. Perry would savage Social Security, dismantle Medicare and Medicaid, gut domestic spending on everything from education to public health, and lavish tax cuts on the corporations and the rich. It works for the 1% — but they live in gated communities and don’t depend on public services. For the rest of us, well, we get fairy tales. Did you know Rick Perry jogs with his gun? Shot a coyote or was it a fox while on his daily run, don’t you know? Our kind of guy.