As the now-smaller fleet of Republican candidates prep for their second round of debates Wednesday--former Texas Governor Rick Perry dropped out on Friday, citing money issues--you can expect there will be a lot more substance mixed in with the more typical sniping.
So far, the debates have been interesting political theater, and the show has been stolen by brash and frequently offensive real estate mogul Donald Trump, who is fond of name-calling and making incendiary remarks, most notably about immigrants. The noise around his candidacy has been so deafening that it’s hard for the other contestants to make themselves heard. But this time they'd better not be wallflowers; Americans are clamoring for substance.
One topic that business owners are eager to hear about is taxes, with 70 percent of registered voters saying the issue is either extremely important or very important, according to a CNN/ORC International poll released September 10.
Ever since Ronald Reagan’s presidency, cutting taxes has been perhaps the defining plank of the Republican Party, so expect the candidates to start clarifying their positions on this vital subject. That should be welcome information, as knowing where the candidates stand on this issue could certainly influence your vote--if not the future of your company.
The current presidential election cycle has shown contenders eager to capture populist anger, in particular about core policy issues like rising income inequality. And come Wednesday night, you can expect to hear about plans that candidates say would change the tax code to address the wealth gap, as well as work as a prop to small-business owners. The Republican candidates will do this with plans that would junk the current unwieldy tax code, with its seven tax brackets, in favor of various flavors of a simplified flat tax, and cut corporate taxes from their current top rate of 35 percent. (Some, such as Texas Senator Ted Cruz, will say they favor flat taxes as well as eliminating the Internal Revenue Service altogether.)
Remember, flat tax proposals have been around for decades, most notably from Steve Forbes, who first formulated the idea of a 17 percent flat tax for his 1996 presidential run. At the time, it was considered outlandish. Now, it’s gone mainstream for Republicans.
Here are five tax plans you'll likely hear more about in Wednesday's debates:
1. Republican frontrunner Trump, who leads with 32 percent of likely Republican voters, according to CNN, may reveal more about his tax plan. Trump has promised something substantive before the end of September, and he’s riled the base by suggesting he’d make the rich pay more, although he seems to favor some sort of flat tax. He has also suggested he would lower corporate taxes and also end corporate inversions, the process whereby many U.S.-based companies avoid paying taxes by incorporating overseas.
Trump is likely to offer greater details on the plan he has already proposed, which could include elements from his short-lived exploration as a Reform Party candidate in 2000, when he laid out a plan called “1-5-10-15.” The plan would have taxed at 1 percent incomes of $30,000 or less. People earning between $30,000 and $100,000 would pay 5 percent; those with incomes between $100,000 and $1 million would be taxed at 10 percent; and those earning more than $1 million would pay a 15 percent tax.
2. Former Florida Governor Jeb Bush, who is often seen as the most plausible Republican candidate and who currently polls in third place among Republican voters, with 9 percent, will surely tout his own tax plan, which he laid out last week. His agenda would create just three tax brackets at 10 percent, 25 percent, and topping out at 28 percent. Joint filers with an income of $38,600 or less and single filers with incomes under $15,300 would not pay taxes. He would also lower the top corporate tax rate to 20 percent and charge an 8.75 percent repatriation tax on assets held overseas.
While Bush’s program calls for full deductions of capital expenditures, it also calls for eliminating interest deductions for business owners, which could pose problems for entrepreneurs who use debt for capital purchases.
3. Florida Senator Marco Rubio released a tax plan in April that proposes to simplify the tax code to two brackets, reduce the top corporate tax rate to 25 percent, and includes a new child tax credit worth $2,500. He’ll likely build on that. Rubio polls in ninth place, with 3 percent of the vote, CNN'spoll reports.
4. Retired neurosurgeon Ben Carson, who trails Trump in second place, with 19 percent of likely Republican voters, also says he favors a flat tax, but has not offered many details. He may start to define his plan on Wednesday.