Fred Thompson Announces Plan for Flat Tax & Social Security Reform

Seen in the Wall Street Journal (subscriber link):

The introduction of a voluntary flat tax is a cornerstone of Mr. Thompson’s proposal. Taxpayers could choose to pay a flat income tax, which would be charged at two rates: 10% for joint filers with income up to $100,000 (or $50,000 for individuals) and 25% on incomes above that. Americans who opted for the flat-tax plan, however, wouldn’t be allowed to take tax credits or deductions including mortgage interest, and would continue to pay taxes on capital gains and dividends.[...]

Mr. Thompson suggested his plan would be funded, in part, by changes to the Social Security system. He has proposed limiting payments to future retirees by cutting their initial benefits. “And if you do that in conjunction with indexing the initial Social Security benefit to inflation instead of wages, at the end of the day you’re going to save Social Security,” Mr. Thompson said on Fox News Sunday.

The Journal points out that Fred’s tax plan is somewhat lacking in details, and may be somewhat unrealistic when it comes to the spending cuts required to balance to current revenues, much less reduced taxes from such a voluntary flat tax scheme.

(When the Journal expresses concern about a tax reduction plan, you know there’s something to be concerned about.)

Also, it’s sad to say, but the plan seems to be likely DOA due to Thompson’s touching the third rail of American politics. He dared to talk about possibly reducing Social Security benefits, a move that would likely cost him a portion of the senior citizen vote.

I respect his chutzpah, but I’d like to see a few more numbers attached to the plan, rather than simple talk about general goals that, on the surface, don’t seem to balance out.