Paul’s Flat-Tax Plan Promising for Primaries, Difficult Beyond That

Sen. Rand Paul (R-Ky.)
Republican presidential candidate Rand Paul says his goal is to ensure that the United States has a tax plan where “everyone plays by the same rules.” For the Kentucky senator, that means a flat tax of 14.5 percent.

Selling that idea to Americans could be an uphill battle, though. A plurality of registered voters – 41 percent – say a flat tax would be less fair than the current tax-collection system, according to a new Morning Consult poll.

Still, that might not hurt Paul during the primaries. Among self-identified conservative voters, 40 percent say a flat tax would be more fair, compared with 29 percent in that cohort who disagree.

On the other side of the ideological spectrum, 54 percent of liberals polled say a flat tax would be less fair, with 28 percent saying it would be more egalitarian.

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Paul’s tax plan doesn’t align perfectly with a “pure” flat tax, though. The traditional definition states that all individuals pay the same rate without any special deductions or credits, whereas his proposal would include a $15,000 standard deduction per filer and a $5,000 per person personal deduction. For a family of four – two filers, two dependents – that would mean no income tax on their first $50,000.

Those deductions would have a significant impact on poor and working class families when compared to a general flat tax. Under U.S. tax code, around 40 percent of low-income households pay nothing in federal income tax after deductions and credits. Those households tend to pay disproportionate amounts of their income on sales, gas and payroll taxes.

The right-leaning Tax Foundation, which published and analysis of Paul’s tax plan, said the proposal would raise after-tax incomes for all income groups, but the highest earners would benefit the most. Those making between $500,000 and $1 million would see their incomes go up by 23 percent, whereas those making between $30,000 and $40,000 would see an increase of 14 percent.

The current U.S. tax code is divided into seven tax brackets for individuals. The lowest rate, for individuals who make less than $10,000 dollars, is 10 percent, while the rate for the highest earners, or those who make more than $413,000, is 39.6 percent. The amount an individual pays in taxes often depends on other factors such as exemptions and deductions.

GOP candidates such as Sen. Ted Cruz (Texas) and retired neurosurgeon Ben Carson have voiced support for some form of flat tax but have not offered specifics. Other Republican White House hopefuls have mentioned support for less radical changes to the tax code, usually for some form of rate-lowering and bracket simplification.

Thirty-four percent of voters polled say a flat tax would be more fair than the progressive system currently in place, and 14 percent say it would be equally fair.

The poll was conducted July 23 through July 27 among a national sample of 1,979 registered voters. Results from the full survey have a margin of error of plus or minus 2 percentage points.

Morning Consult