Columbia, S.C. (CNSNews.com) – Republican primary contender Newt Gingrich said his 15 percent optional flat tax would be re-named the “Mitt Romney flat tax,” after news reports stated that the wealthy frontrunner and former Massachusetts governor paid 15 percent of his income in taxes for 2011.
“You want to have a single page. I earn this amount. I have this many dependents. I pay 15 percent. Fine,” Gingrich said at a presidential candidate forum sponsored by the South Carolina Business and Industrial Political Education Committee, on Tuesday evening.
“I didn’t realize until today that Gov. Romney paid about 15 percent. So we’re now calling my 15 percent flat tax the Mitt Romney flat tax,” said Gingrich, a former Speaker of the House. “And our principle is why shouldn’t you be able to pay the same percentage he does?”
Romney told reporters on Tuesday that his tax rate is “probably closer to [the] 15 percent rate than anything.”
Though wages are taxed at a top rate of 35 percent, investment income is taxed at a top rate of 15 percent. Romney’s tax bill is in line with most of the top 20 percent that derive a bulk of their pay from investments, according to The Wall Street Journal.
Gingrich’s plan is a voluntary 15-percent flat tax, meaning that if taxpayers wanted to remain under the current Internal Revenue System code, they could, with the various exemptions. Or, they could switch to a 15-percent flat rate.
“Now, that’s going to lead to what liberals call a revenue shortfall, to which my answer is, terrific,” Gingrich said. “That just means we’ve got to cut the government more.”
Texas Gov. Rick Perry has proposed a plan similar to the Gingrich plan that would be a voluntary 20-percent flat tax.
Texas Rep. Ron Paul has essentially proposed a flat tax of zero percent. He supports the complete elimination of income, capital gains, and death taxes. (Prior to 1913, there was no federal tax on people’s income. The government got most of its money from taxes levied on products made in the United States and on products imported.)
Former Pennsylvania Sen. Rick Santorum has proposed a two-tier tax system of 10 percent for lower earners and 28 percent for higher earners. His argument is that a flat tax could not pass Congress.
Mitt Romney has proposed maintaining the current Bush-era tax rates on income, interest, dividends and capital gains. He recently said no one should have to pay more than 25 percent of their earnings in taxes.
Romney also has proposed eliminating the death tax, and his Web site says he would “pursue a conservative overhaul of the tax system over the long term that includes lower, flatter rates on a broader base.” Romney would cut the corporate tax rate to 25 percent, a smaller cut than Santorum proposed.