By his own admission, this would decrease revenue by $200 billion per year, a nearly 50% increase on Obama’s current deficits. To avoid this, Rand says that he would cut as-yet unspecified spending programs.
To Rand’s credit, some of these cuts could come from the military. His
budget proposal in 2013 included about an 11% cut to military spending: from a projected $588 billion in 2014 to $521 billion after that. Of course, that wouldn’t be anywhere near enough to pay for his tax plan, and Rand didn’t have to impress GOP primary voters at that time, so if he intends to make the math work to get his tax plan to revenue neutrality, he’s certainly going to have to go after lots of domestic programs. Past legislative campaigns against the Department of Education, Medicaid and food stamps, which Rand Paul has not-to-subtlely called “
slavery.”
Rand Paul, via
Creative Commons
Food stamps are a cornerstone of the American social safety net, and produce remarkably efficient economic multipliers. Every five dollars of money spent by the government on food stamps
creates up to nine dollars in economic activity. It pulls up to 4 million people out of poverty per year. Food stamp programs have demonstrably reduced the risk of low income children getting hypertension, obesity, and diabetes by
as much as 68%. Far from being the seeds of dependency, the program reduces food insecurity and allows beneficiaries to focus on getting a job instead of where they’ll get their next meal. The result is that
well over half of families are working within a month of receiving food stamps and over 80% are employed in the year following receiving food stamps. What’s more, many families who receive food stamps already have a job, but are kept in need of food assistance by a too-low minimum wage, a
byproduct of our corporate welfare apparatus that Rand Paul
opposes raising. Rand believes that minimum wage jobs
are for children, and doesn’t seem to have a clear path forward for these families who depend on it once he cuts their ability to get food and reduces their pay.
What’s more, that 14.5% flat tax would actually amount to a tax
increase on these, the poorest of working families, who currently don’t earn enough in wages to qualify for the federal income tax at all. They’d love to earn enough to pay income taxes, but that requires a livable, taxable wage.
Ignoring and at times flatly denying these facts, Senator Paul claims that his tax cuts for businesses and the wealthy will trickle down. He also says that “the left will argue that the plan is a tax cut for the wealthy. But most of the loopholes in the tax code were designed by the rich and politically connected.” That’s a good line, but it doesn’t say anything about whether his plan will have net positive or negative effects on the wealthy’s tax rates. And the data don’t back him up: While it’s true that loopholes are written for and exploited by wealthier interests, it’s also true that Paul’s plan would feature businesses paying an average of
5 percent less than businesses are paying under the current system, even once every tax loophole is closed.
Senator Paul will argue on the trail that these tax cuts will help businesses hire more workers. This assumes that businesses hire based on something other than need. The motivation of a business is to maximize profit; taxes affect how much profit businesses get to distribute amongst their shareholders keep, but not how much is generated, which is why there is
no correlation between tax cuts and job creation.
What stimulates job creation is increasing demand. More demand creates a greater need for more goods, which creates a need for more jobs in order to raise a corporate profit margin. The only way to raise demand is to raise the buying power of the people. Money in the pockets of the people, not corporations, drives economic growth.
A flat tax is intrinsically regressive. The more you have, the less likely a flat tax is to bite into the money you need for your necessities. Rand’s plan would decrease revenue just for the sake of being able to cut taxes for the wealthy and for corporations, and he intends to make up for it with bad economics, bad math and a spending policy that would devastate some of our most important economic stimuli. It would leave millions of people in poverty and millions of children in greater need of health programs.
Which, of course,
he would repeal.
The takes keep rolling in 
Its been awhile so I don't really remember it vividly.
