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1 Alan Cole, Details and Analysis of Senator Rick Santorum's Tax Plan 1 (2015)

handle is hein.taxfoundation/darksantxp0001 and id is 1 raw text is: FISCAL FACT Oct. 2015 No. 485 The Tax Foundation is a 501(c)(3) non-partisan, non-profit research institution founded in 1937 to educate the public on tax policy. Based in Washington, D.C., our economic and policy analysis is guided by the principles of sound tax policy: simplicity, neutrality, transparency, and stability. ©2015 Tax Foundation Distributed under Creative Commons CC-BY-NC 4.0 Editor, Melodie Bowler Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 202.464.6200 taxfoundation.org Details and Analysis of Senator Rick Santorum's Tax Plan By Alan Cole Economist Key Findings * Senator Santorum's tax plan would enact a 20 percent flat tax on individual and corporate income, and repeal a number of complex features in the current tax code. * Senator Santorum's plan would cut taxes by $3.2 trillion over the next decade on a static basis. However, the plan would end up reducing tax revenues by $1.1 trillion over the next decade when accounting for economic growth from increases in the supply of labor and capital. * According to the Tax Foundation's Taxes and Growth Model, the plan would significantly reduce marginal tax rates and the cost of capital, which would lead to a 10.2 percent higher GDP over the long term, provided that the tax cut could be appropriately financed. * The plan would also lead to a 29 percent larger capital stock, 7.3 percent higher wages, and 3.1 million more full-time equivalent jobs. * On a static basis, the plan would cut taxes by 3 percent on average for all taxpayers. The top one percent of taxpayers by income would have the highest increases in after-tax income, along with the lowest ten percent. However, some upper-middle-income deciles would have decreases in after-tax income. * Accounting for economic growth, all taxpayers would see an increase in after-tax income of at least 7.5 percent at the end of the decade ..................

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