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Break It Down: Republican Candidates' Tax Plans


In last night's presidential debate, Republicans defended their plans to simplify the tax code. It turns out that's complicated. NPR's Scott Horsley breaks it down.


RONALD REAGAN: For our friends in the press who place a high premium on accuracy, let me say, there you go again.

SCOTT HORSLEY, BYLINE: Retired neurosurgeon Ben Carson is near the top of the polls. So it's not surprising his tax plan came under the scalpel in the CNBC debate on Westwood One. Carson denied his plan for a flat tax of 10 percent, based on the biblical principle of tithing, would cost the government more than a trillion dollars.


BEN CARSON: Well, first of all, I didn't say that the rate would be 10 percent. I used the tithing analogy. The rate is going to be much closer to 15 percent.

HORSLEY: Texas Senator Ted Cruz introduced his own tax plan last night. Families would get a break on some of their income, but beyond that, everyone would pay the same 10 percent rate.


TED CRUZ: The billionaire and the working man - no hedge fund manager pays less than his secretary.

HORSLEY: Former Hewlett-Packard CEO Carly Fiorina says what really matters is whittling down the tax code from tens of thousands of pages to three.


CARLY FIORINA: Three pages is about the maximum that a single business owner or a farmer or just a couple can understand without hiring somebody. Almost 60 percent of American people now need to hire an expert to understand their taxes.

HORSLEY: I decided to consult some experts of my own to answer a big question. Do the Republicans' simpler tax plans pencil out? Not all the candidates go so far as Carson or Cruz in calling for a single tax rate, but most move in that direction. Chief economist Nariman Behravesh of IHS says the idea is to discourage people from doing things they otherwise wouldn't just to lower their tax bill.

NARIMAN BEHRAVESH: So I think among economists, there is this view that the simpler the tax code, the flatter the tax code, in some sense the better it is.

HORSLEY: But Behravesh says there are two potential drawbacks. Flatter taxes can add to the deficit if they reduce overall revenue. And they can worsen income inequality. Carson's plan appears to do both. Bob Williams of the nonpartisan Tax Policy Center says even if Carson uses the 15 percent rate he talked about last night, his plan would still leave a gaping hole in the federal budget. What's more, Williams says, the wealthy would be the biggest winners under Carson's plan and the other GOP proposals.

BOB WILLIAMS: Every one of the Republican plans that I've seen gives the bulk of tax cuts to people at the top of the income distribution. And a big part of that is the fact that those are the people paying a lot of tax right now. And if you try to flatten things out, you're going to end up cutting taxes for the wealthy.

HORSLEY: So it turns out simple is not that simple. And as appealing as a three-page tax code might sound, that could require giving up the kind of tax breaks - on health care and retirement and mortgage interest - that some of us have grown attached to. Scott Horsley, NPR News. Transcript provided by NPR, Copyright NPR.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.