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1 Kyle Pomerleau, Details and Analysis of Dr. Ben Carson's Tax Plan 1 (2016)

handle is hein.taxfoundation/dabctxp0001 and id is 1 raw text is: TAXO FOUNDATION FISCAL FACT Jan. 2016 No. 493 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, DC, our economic and policy analysis is guided by the principles of sound tax policy: simplicity, neutrality, transparency, and stability. @2016 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 Dr. Ben Carson's Tax Plan By Kyle Pomerleau Director of Federal Projects Key Findings * Dr. Ben Carson's tax plan would replace the federal income tax code with a modified Hall-Rabushka-style flat tax of 14.9 percent. * Dr. Carson's plan would cut taxes by $5.6 trillion over the next decade on a static basis. However, the plan would end up reducing revenues by $2.5 trillion over the next decade when accounting for economic growth, due to increases in the supply of labor and capital. * The plan would also result in increased outlays, due to higher interest on the debt, creating a 10-year deficit somewhat larger than the estimates above. * The plan would move to a consumption base, which would significantly reduce the cost of capital. According to the Tax Foundation's Taxes and Growth Model, the plan would lead to a 16 percent higher GDP over the long term, provided that the tax cut could be appropriately financed. * The plan would also lead to a 46.6 percent larger capital stock, 10.9 percent higher wages, and 5.2 million more full-time equivalent jobs. On a static basis, the plan would increase taxes on all income groups except the top 10 percent of taxpayers. The plan reduces the after-tax income of the bottom three income deciles by as much as 14.8 percent. The top decile would see an increase in after-tax income of 16 percent and the top 1 percent would see an increase of 33 percent. * Accounting for economic growth, all taxpayers would see an increase in after-tax income of at least 0.5 percent in the long term.