The audience is responding, the truth is that there are audits. In fact, reading the page of the IRS’s a percentage of people being audited and we have to consider that in the last four years the IRS has quadrupled force auditors. In other words, if I had a thousand employees and I quadruple them, I have now four thousand employees who have the title of auditors. If I have more auditors it means I’m doing more audits. We’re talking about simple mathematics, very practical things, but that is the reality, this is what has been happening in the last four years. The consequence of this is that there are more people exposed to such audits.

Another situation that is happening is that there are people giving information to the IRS. As we discussed in previous programs they are telling now how much people paid with credit cards in recent years, the government is also requiring more financial institutions even abroad to report this information, people who have accounts outside United States, this information is coming to the government, so the more information there are more tools in the department to do their job. To these people we are helping them to be daily updated, fulfilled and at least harmed out these audits. Sometimes experience tells us that the information provided is incorrect, because people did not understand or did not do what they had to do. An example: a person has to make a payroll report because it has employees, the person ceases to be employed but not reported to the government, and then the government assumes that still has employees and makes quarterly report. If this person doesn’t make the report, the government does it and establishes a debt, he is claiming something that is not real and if the person is not able to fix it end up paying a debt that did not belong.
The audits have different ways and you should be clear on how to deal with it, so you do not have problems.

For entrepreneurs, many of the audits are focused on companies in business, what is audited there?

A business usually has two areas, has the input area and output revenue income and the reality that unites the business is that everything is auditable, people often think it’s just the economics. In the month of May came a new way that made the internal revenue department and the immigration department, form 19, form related to the employees of your business, how to redesign and there is a new form, to 20 years that form had not changed and are now demanding to be the new form that is used.

Many companies do not even know that there is a new form that must be filled, not having this information does not meet the requirements, and are in a rape and the government can fine. It is important that you catch up, you know what is happening, not only in the economic, this example does not have to do either with the financial part, except that you get a ticket and you have to pay, because it is an effect has to do with how to operate, to have employees. You must have a shape that is how 19 and must be the current form.

When a person receives a letter saying “we will audit”, what is the first thing you do and why you probably received this letter?

They will receive a document that will say they are doing an audit, a review of his statement. You have to pay attention to this letter. The first thing you have to do is open it and face it. Sometimes there are people who do not open and when they open their 3 or 4 letter, and the audit step without you, I mean, you have the result, then it is important that any correspondence from the IRS that you received, the open and the the corresponding importance. In many cases, the reality is that many audits can be solve over the phone and they are audits that are wondering what really are differences, and these are fairly simple to solve, but there are other audits that are not that easy, where you want see details and there must also give the corresponding importance, as it is a little harder.

Why am I being audited and that audits arise?

The audit comes as a congressional mandate and purpose they have is to check that what people say is their statements is correct. Remember that in America we are through what is called the Honor System. The Honor System means that if I put that I win $ 10, then I win $ 10 and I earn U.S. $ 15, if I got to spend U $ 8 these U $ 8 must be related to what I put in the declaration and audit what it does is simply verify that what got this right. So when you would get a letter does not mean it’s a problem, what it means is you have to check if you have done the right thing, if you have declared all your income, if you put only those deductions or discounts you entitled. You need not fear this type of review.

What are the most common letters sent by the IRS to communicate to a person’s situation?

This is very important, at this time the IRS does not communicate with any of e-mail, so be careful, yes you get an e-mail that says IRS, not the IRS, they do not communicate by e-mail , they communicate by letters sent by regular first class mail, when the letter arrives, you open it and follow the procedure. The most common letter are seeing is the discrepancy letter, it means that he has forgotten something in the statement, ie, that have received extra information that has not been put in the declaration and often these letters are solved by introducing email additional evidence or filed the amended return. It is the easiest letter and you have to pay attention because otherwise you may face potential problem.

What if the person does not respond to that letter that says that you forgot to submit this statement, this income “?

If you do not respond, the IRS will continue running, remember that the process will continue with or without you, the only thing is that in the end you are the injured party that he will always get the collection letter, if you do not case, they will continue running assuming that income was his, that you had that debt if you are going to start charging.

Workshop practices and duties of all companies and entrepreneurs Expolit again in 2013 – Alfonso Cordero cpa presents practical workshop and duties of all companies and entrepreneurs.

You will learn:

What’s hot in the IRS in these times, the five most common mistakes committed by a board of directors and how to avoid them. Where is focusing the state of Florida to find money these days and how to be prepared.

Who should attend this workshop:

1. Any person who is a member of a board of directors
2. Any person handling the accounting
3. Any person responsible for signing the reports that are sent to government
4. Any person who has signature on the bank account of any company or business
5. And finally you

Sunday May 5, 2013
At 3:00 pm
Salon: MCC-200
With general admission to Expolit 2013 can attend the seminar free of charge.

Si ud le debe dinero al IRS, ellos quieren ayudarle, ellos saben que han habido situaciones económicas, y por esto quieren negociar con ud, por ejemplo: si le debe 100 ellos le pueden decir pagenme 10. Esto puede beneficiar a cualquier persona o negocio que tenga una deuda con el IRS.

Porque existe esta iniciativa?

Es por la realidad del mercado, se enfatiza en algo que se llama la oferta de compromiso, esto siempre ha existido, lo nuevo es como se evalúa esa oferta de compromiso, anteriormente los parametros decían que si tiene la capacidad de pagar $1,000 al mes lo multiplico por 60 y esa es la cantidad mínima de oferta que ud puede hacer. Si debe $200,000 podría hacer una oferta de $60,000 que sigue siendo bueno ya que estaría evitando pagar $140,000.

Pero el programa nuevo dice que no lo multipliquemos por 60 sino por 12 solamente, asi que en vez de $60,000 ahora lo puede pagar por $12,000, lo cual serian $188,000 en ahorro.

Esto es un tecnicismo de evaluacion que se abre como una ventana, que las personas deben utilizar ahora antes que se cierre y algo que hubiera podido haber pagado por 12,000 en el ejemplo que dimos anteriormente lo va a tener que pagar por $60,000 si no aprovecha esta oportunidad.

Alfonso Cordero le ayuda con este programa de fresh start del IRS, puede comunicarse ahora mismo para mas información con las oficinas de Cordero CPA.

Si ud debe dinero al IRS y no puede pagar la cantidad completa, ésta es la mejor opción, un plan de pago y una oferta de compromiso.

Acerca del short-sale, personas que han estado en foreclosure hay una diferencia que queda pendiente, las personas tienen dos opciones: la primera es revisar la declaración de impuestos, muchas veces está mal preparada y ud no debe la cantidad que dicen que debe y la segunda opción es aprovechar el fresh start del que hemos estado hablando anteriormente para poder pagar centavos del dolar que ud debe.

Para todo esto ud debe actuar ahora mismo, para más información llame ahora mismo a Cordero CPA 305-599-4111 y si conoce a alguien que tiene alguno de estos problemas compartale este número de teléfono.

Cordero, CPA, PA

In order to determine whether you have reported your deduction and expenses and other items correctly, the IRS may audit your income or business tax. Their representatives are trained to extract more information than you need to disclose during your audit and the information they get from you will help them increase your tax liability, which often can lead to more tax years being audited. They have the power to ask you to show documentation for every item on your tax return, including expense receipts, invoices, and other items you may not have access to. The biggest reason people receive letters from the IRS is addition or subtraction errors which rarely leads to a full audit but double-check your math anyway before you send in your return. A sloppy return is most likely to get a thorough check by the IRS, especially if the important numbers are illegible.
If the IRS examines one of your returns, the examination will usually take place through the mail. The IRS uses correspondence audits to take care of the most common tax return problems, such as mathematical errors, missing forms and schedules, and illegible entries. You must return the audit notice along with any documentation and explanations the IRS has requested. The requested documentation might include: home mortgage statements, tax returns, pay stubs, receipts, brokerage statements, and retirement account.
In a field audit, the examiner visits your home or business to verify the information on your tax return.
In an office audit, you must go to an examiner’s office. The examiner requires you or your representative — such as your tax preparer or lawyer — to bring documentation and information such as receipts, pay stubs, or account statements. At the end of the audit, the examiner will mail you or give you a 30-day letter which consists of a copy of the examination report, an explanation of how the IRS wants to change your tax return to reflect the report’s findings, an explanation of your right to appeal and a publication called “Your Appeal Rights and How To Prepare a Protest If You Don’t Agree.” You have 30 days to respond, so if you’re not sure about the IRS’s findings and you want to consult a tax professional, don’t rush to sign the examination report. If, within 30 days, you find the IRS is correct, indicate you agree and sign the examination report. If you do not agree, however, you can appeal the findings before the 30 days is up. An appeal, handled by an IRS Appeals Officer, can take a year or longer. Following the appeal, the IRS sends a 90-day letter, which gives you 90 days to request an escalation to Tax Court, in case you don’t agree with the Appeals Officer’s findings. Most audits are resolved long before Tax Court comes into the picture.
Cordero, CPA, PA can represent you through your audit, you don’t need to attend. Our specialists will handle your entire audit for you. When and if the IRS returns and they believe there is something wrong with a claimed item, they may request more documentation and information. When the IRS decides to audit you they send you a Notice of Audit. You then have 30 days to respond to their notice, along with a list of documents, and the revenue officer assigned to your case. Most audits are won by the IRS because the taxpayer failed to respond, or provide the documents required.

Contact us today for a free audit evaluation. Cordero, CPA, PA, a bi-lingual firm, are here to answer all of your questions and concerns. We are based in Miami and Orlando, FL and are here to assist you. Give us a call at 305-599-4111 in Miami or 407-931-0002 in Orlando.

Income tax is a tax levied on the income of individuals or businesses. Personal income tax is often collected on a pay as you earn basis, with corrections made right after the end of the tax year. These corrections take one of two forms. One being, payments to the government by taxpayers who did not pay enough during the tax year, and secondly, tax refunds from the government to those who overpaid.

There are deductions that are available that lessen the total tax liability by reducing total taxable income and losses from one type of income to be counted against another. When the tax is levied on the income of companies, it is often called a corporate tax. Individual income taxes often tax the total income of the individual, while corporate income taxes often tax net income, the difference between expenses, gross receipts, and additional write-offs.

The types of payment that are taxed include personal earnings, which are wages, capital gains, and business income. Capital gains may be taxed when shares are sold or when incurred. Interest on bank savings may be considered as personal earnings. Gambling wins may be considered as earnings also. There are deductions available that lessen the total tax liability by reducing the total taxable income. They may allow losses from one type of income to be counted against another. A loss on the stock market may be deducted against taxes paid on wages. Losses can also be isolated, the business losses can be deducted against business tax by carrying forward the loss to later tax years.

There are so many possibilities and we at Cordero, CPA, PA, a bi-lingual firm, are here to answer all of your questions and concerns. We are continually educating our staff with the latest tax laws and tax codes which are often overlooked by the uninformed.

These oversights by the untrained can cost you dearly. We are based in Miami and Orlando, FL and are here to prepare your tax returns. Give us a call at 305-599-4111 in Miami or 407-931-0002 in Orlando.

Taxpayers filing a Schedule C must report the correct gross income and all related deductions on their return.  Determining the correct income and deductions creates an issue for preparers who need to verify the income reported and expenses claimed, whether this is a result of poor record keeping or a direct attempt to falsify figures to optimize credits.

The common income-reporting issues are:

•  Questionable Schedule C income to qualify for EITC (i.e., taxpayers with no 1099)

• Questionable Schedule C losses that reduce other income and qualify taxpayers for EITC
• Schedule C income, but the taxpayers have no records for income or expenses
• Income from Schedule C businesses, but no expenses when it is reasonable to expect the taxpayer incurred expenses

Schedule C Recommendations

REPORT ONLY INFORMATION THAT IS VALID AND SUSTAINABLE.  INCORRECT AND / OR FRAUDULENT INFORMATION ONLY INCREASES THE OPPORTUNITIES FOR AN AUDIT.

AND REMEMBER:  SI ME DICEN TAXES – YO DIGO CORDERO.

WASHINGTON — Nearly 160 million workers will benefit from the extension of the reduced payroll tax rate that has been in effect for 2011. The Temporary Payroll Tax Cut Continuation Act of 2011 temporarily extends the two percentage point payroll tax cut for employees, continuing the reduction of their Social Security tax withholding rate from 6.2 percent to 4.2 percent of wages paid through Feb. 29, 2012. This reduced Social Security withholding will have no effect on employees’ future Social Security benefits.

Employers should implement the new payroll tax rate as soon as possible in 2012 but not later than Jan. 31, 2012. For any Social Security tax over-withheld during January, employers should make an offsetting adjustment in workers’ pay as soon as possible but not later than March 31, 2012.

Employers and payroll companies will handle the withholding changes, so workers should not need to take any additional action.

Under the terms negotiated by Congress, the law also includes a new “recapture” provision, which applies only to those employees who receive more than $18,350 in wages during the two-month period (the Social Security wage base for 2012 is $110,100, and $18,350 represents two months of the full-year  amount). This provision imposes an additional income tax on these higher-income employees in an amount equal to 2 percent of the amount of wages they receive during the two-month period in excess of $18,350 (and not greater than $110,100).

This additional recapture tax is an add-on to income tax liability that the employee would otherwise pay for 2012 and is not subject to reduction by credits or deductions.  The recapture tax would be payable in 2013 when the employee files his or her income tax return for the 2012 tax year. With the possibility of a full-year extension of the payroll tax cut being discussed for 2012, the IRS will closely monitor the situation in case future legislation changes the recapture provision.

The IRS will issue additional guidance as needed to implement the provisions of this new two-month extension, including revised employment tax forms and instructions and information for employees who may be subject to the new “recapture” provision.  For most employers, the quarterly employment tax return for the quarter ending March 31, 2012 is due April 30, 2012.

Most tax provisions of course, remain the same (IRA contribution limits for example), but a few such as personal exemptions have been adjusted for inflation and others have been extended due to legislation and are set to expire at the end of 2012.

From tax credits, exemptions and deductions for individuals and Section 179 expensing for small businesses, here’s what you need to know about tax changes for 2011.

Individuals

From personal deductions to tax credits and educational expenses, many of the tax changes relating to individuals remain in effect through 2012 and are the result of tax provisions that were either modified or extended by the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 that became law on December 17, 2010.

Personal Exemptions
The personal and dependent exemption for tax year 2011 is $3,700, up $50 from 2010.

Standard Deductions
In 2011 the standard deduction for married couples filing a joint return is $11,600, up $200 from 2010 and for singles and married individuals filing separately it’s $5,800, up $100. For heads of household the deduction is $8,500, also up $100 from 2010.

The additional standard deduction for blind people and senior citizens is $1,150 for married individuals, up $50, and $1,450 for singles and heads of household, also up $50.

Income Tax Rates
Due to inflation, tax-bracket thresholds will increase for every filing status. For example, the taxable-income threshold separating the 15-percent bracket from the 25-percent bracket is $69,000 for a married couple filing a joint return, up from $68,000 in 2010.

Estate and Gift Taxes
The recent overhaul of estate and gift taxes means that there is an exemption of $5 million per individual for estate, gift and generation-skipping taxes, with a top rate of 35%. For married couples the exemption is $10 million.

Alternative Minimum Tax (AMT)
AMT exemption amounts for 2011 are slightly higher than those in 2010 at $48,450 for single and head of household fliers, $74,450 for married people filing jointly and for qualifying widows or widowers, and $37,225 for married people filing separately.

Marriage Penalty Relief
For 2011, the basic standard deduction for a married couple filing jointly is $11,600, up $200 from 2010.

Pease and PEP (Personal Exemption Phaseout)
Pease (limitations on itemized deductions) and PEP (personal exemption phase-out) limitations do not apply for 2011, but these are set to expire at the end of 2012.

Flexible Spending Accounts (FSA)
The Affordable Care Act, enacted in March, established a new uniform standard, effective January 1, 2011, that applies to FSAs and health reimbursement arrangements (HRAs).

Under the new standard, the cost of an over-the-counter medicine or drug cannot be reimbursed from the account unless a prescription is obtained. The change does not affect insulin, even if purchased without a prescription, or other health care expenses such as medical devices, eye glasses, contact lenses, co-pays and deductibles.

The new standard applies only to purchases made on or after Jan. 1, 2011, so claims for medicines or drugs purchased without a prescription in 2010 can still be reimbursed in 2011, if allowed by the employer’s plan.

A similar rule went into effect on Jan. 1, 2011 for Health Savings Accounts (HSAs), and Archer Medical Savings Accounts (Archer MSAs).

Long Term Capital Gains
In 2011, long-term gains for assets held at least one year are taxed at a flat rate of 15% for taxpayers above the 25% tax bracket. For taxpayers in lower tax brackets, the long-term capital gains rate is 0%.

Individuals – Tax Credits
Adoption Credit
A refundable credit of up to $13,360 for 2011 is available for qualified adoption expenses for each eligible child.

Child and Dependent Care Credit
If you pay someone to take care of your dependent (defined as being under the age of 13 at the end of the tax year or incapable of self-care) in order to work or look for work, you may qualify for a credit of up to $1,050 or 35 percent of $3,000 of eligible expenses.

For two or more qualifying dependents, you can claim up to 35 percent of $6,000 (or $2,100) of eligible expenses. For higher income earners the credit percentage is reduced, but not below 20 percent, regardless of the amount of adjusted gross income.

Child Tax Credit
The $1,000 child tax credit has been extended through 2012. A portion of the credit may be refundable, which means that you can claim the amount you are owed, even if you have no tax liability for the year. The credit is phased out for those with higher incomes.

Energy Tax Credits for Homeowners
Energy tax credits for homeowners expire at the end of 2011 and are not as generous as in previous years. In addition, a taxpayer who has claimed an amount of $500 in any previous year is not eligible for this tax credit.

Homeowners can claim an Energy Star window tax credit of up to $200 maximum as well as a water heater tax credit, which includes electric, natural gas, propane, or oil, up to a maximum of $300. The same maximum ($300) applies to air conditioners, but insulation, doors, and roof credits are capped at $500. The furnace tax credit (includes natural gas, propane, oil, or hot water) and is capped at $150 maximum and efficiency must be at 95%.

Earned Income Tax Credit (EITC)
The maximum EITC for low and moderate income workers and working families is $5,751, up from $5,666 in 2010. The maximum income limit for the EITC has increased to $49,078, up from $48,362 in 2010. The credit varies by family size, filing status and other factors, with the maximum credit going to joint filers with three or more qualifying children.

Individuals – Education Expenses

Coverdell Education Savings Account
For two more years, you can contribute up to $2,000 a year to Coverdell savings accounts. These accounts can be used to offset the cost of elementary and secondary education, as well as post-secondary education.

American Opportunity Tax Credit (Higher Education)
The expansion of the Hope Scholarship Credit by the American Opportunity Tax Credit has been extended through 2012. For 2011, the maximum Hope Scholarship Credit that can be used to offset certain higher education expenses is $2,500, although it is phased out beginning at $160,000 adjusted gross income for joint filers and $80,000 for other filers.

Employer Provided Educational Assistance
Through 2012, you, as an employee, can exclude up to $5,250 of qualifying post-secondary and graduate education expenses that are reimbursed by your employer.

Lifetime Learning Credit
A credit of up to $2,000 is available for an unlimited number of years for certain costs of post-secondary or graduate courses or courses to acquire or improve your job skills. For 2011, the credit is fully phased out at $122,000 adjusted gross income for joint filers and $61,000 for others.

Student Loan Interest
For 2011 and 2012, the $2,500 maximum student loan interest deduction for interest paid on student loans is not limited to interest paid during the first 60 months of repayment. The deduction begins to phase out for higher-income taxpayers.

Tuition and Related Expenses Deduction
For 2010 and 2011, there is an above-the-line deduction of up to $4,000 for qualified tuition expenses. This means that qualified tuition payments can directly reduce the amount of taxable income, and you don’t have to itemize to claim this deduction. However, this option can’t be used with other education tax breaks, such as the American Opportunity Tax Credit, and the amount available is phased out for higher-income taxpayers.

Individuals – Retirement

Roth IRA Conversions
There is no longer an income limit for taxpayers who want to convert regular IRAs into Roth IRAs. The difference is that taxpayers who convert to Roth IRAs in tax year 2011 must pay taxes on the conversion income now instead of deferring it in later years as was the case in 2010.

Businesses

Standard Mileage Rates
The standard mileage rate increases to 51 cents per business mile driven (19 cents per mile driven for medical or moving purposes and 14 cents per mile driven in service of charitable organizations) for the first half of 2011. From July 1, 2011 to December 31, 2011 however, the rate increases to 55.5 cents per business mile. This increase is a special adjustment by the IRS and reflects higher gasoline prices.

Health Care Tax Credit for Small Businesses
Small business employers who pay at least half the premiums for single health insurance coverage for their employees may be eligible for the Small Business Health Care Tax Credit as long as they employ fewer than the equivalent of 25 full-time workers and average annual wages do not exceed $50,000. The credit can be claimed in tax years 2010 through 2013 and for any two years after that. The maximum credit that can be claimed is an amount equal to 35% of premiums paid by eligible small businesses.

Section 179 Expensing
In 2011 (as well as 2010), the maximum Section 179 expense deduction for equipment purchases is $500,000 ($535,000 for qualified enterprise zone property) of the first $2 million of certain business property placed in service during the year. The bonus depreciation increases to 100% for qualified property. If the cost of all section 179 property placed in service by the taxpayer during the tax year exceeds $2 million, the $500,000 amount is reduced, but not below zero.

Please contact us if you need help understanding which deductions and tax credits you are entitled to. We are always available to assist you.

Rick Perry is proposing letting Americans choose between their existing income tax rate or a new flat tax of 20 percent, part of a tax and spending reform plan that the Republican presidential candidate is dubbing “Cut, Balance and Grow.”
“The goal of my ‘Cut, Balance and Grow’ plan is to unleash job creation, address the current economic crisis, while at the same time generating a stable source of revenue to address our record deficit and put our fiscal house in order,” Perry, the governor of Texas, said at an event Tuesday in South Carolina.
Perry said people taking up the flat tax can scrap the current code, and it would lower and simplify tax rates to the point that Americans could file their tax returns on a post card, which he pulled out as he spoke.
His plan would also get rid of the Alternative Minimum Tax for families, balance the federal budget by 2020, reform entitlements, ban earmarks and impose a cap on federal spending at 18 percent of gross domestic product.
Perry’s proposed flat tax would preserve key tax exemptions for families earning less than $500,000 a year and would increase the standard deduction to $12,500 for individuals. It would also eliminate the tax paid on the country’s largest estates when property owners die and eliminate taxes on Social Security benefits.
He also revived a proposal to allowed young workers to invest part of their payroll taxes into private accounts — a plan that President Bush once pushed until it died in a Republican-controlled Congress.
“The flat tax will unleash growth but growth’s not enough,” Perry said. “We must put a stop to this entitlement culture that risks the financial solvency of this country for future generations. I mean the red flags are alarming.”
He called for corporate tax reform, including a one-time reduced tax rate of 5.25 percent for businesses that bring their profits that are parked overseas back to the U.S.

“The U.S. Chamber (of Commerce) estimates this one-time tax reduction would bring more than $1 trillion in capital back to the U.S. create up to 2.9 million jobs, and increase economic output by $360 billion,” he said.

“In other words, it’s the kind of economic stimulus President Obama could have achieved if he wasn’t hell-bent on passing big government schemes that have failed American workers,” he said.
Perry’s proposal comes two and a half months after he began running for the GOP nomination, and following lackluster appearances in several debates.

The policy rollout is a critical part of Perry’s efforts to right a struggling campaign as well as set him back up against rivals like Mitt Romney, who hasn’t suggested a flat tax, and Herman Cain, who has proposed a 9-9-9 plan of 9 percent corporate income tax rates and a 9 percent national sales tax.
Publisher Steve Forbes, one of Perry’s key supporters for the 2012 Republican nomination, described the proposal as appealing to all comers.

“You have to make a real sum of money before the tax kicks in,” Forbes told Fox News, describing the basics of Perry’s plan. “Middle-income people are not going to pay more and they are going to save huge amounts of money.”

Unlike Herman Cain’s 9-9-9 plan, which relies largely on a new national sales tax, Perry said he would avoid a sales tax while lowering the corporate tax to 20 percent and eliminate taxes on dividends and capital gains, aiming to free up money that presumably would be invested in economic growth.
Forbes argued that a flat tax gets rid of the billions of hours in paperwork, and possibly the millions of jobs that go with tax filings. Without changes to the code, he noted, the Tax Foundation estimates that by 2015, $483 billion alone will be spent on trying to interpret and understand the code.

“You put something like the Perry plan in place, that is several hundred billions in savings off the bat, that’s huge,” he said.

Proponents of the flat tax argue that a uniform rate will improve the U.S. economy because it will increase take-home wages, in essence incentivizing work. Lower taxes, they claim, will also encourage entrepreneurship.

President Obama’s campaign, ready on the criticism, issued a statement saying Perry’s plan, as well as Romney’s are intended to benefit high-income households at the expense of the middle class.
“Both the Romney and Perry economic plans embrace a far-right vision for our tax code,” wrote James Kvaal, policy director for Obama for America. “They share elements with plans offered by congressional Republicans, which independent economists believe would fail to accelerate job creation now. Both plans would cut taxes on wealth and investment income, shifting the tax burden onto work and wages. Both plans are likely to be costly, driving up the deficit at a time of historic fiscal challenges. And under both plans, the most fortunate Americans would pay less while the middle class would pay a higher share.”

But Perry’s campaign dismissed the criticism.
“Gov. Perry’s plan will reduce taxes for everybody and grow the economy and not pit Americans against each other like President Obama is doing,” Perry campaign spokesman Mark Miner told Fox News.

The Club for Growth, a conservative economic group, praised the proposal.
“Rick Perry’s plan for tax reform would be massively pro-growth,” the club’s president, Chris Chocola, said. “A flat tax like the one proposed by Perry would unleash years of economic growth if it is passed into law.

Chocola said he continues to be “disappointed” that Romney has not embraced a flat or fair tax.
“He would be wise to avoid using class warfare when comparing his current proposals to those of Gov. Perry or Herman Cain,” he said. “The Club for Growth is looking for bold leadership on tax reform from the Republican nominee — not demagoguery or platitudes.”

Read more: http://www.foxnews.com/politics/2011/10/24/perry-to-pitch-scrapping-tax-code-offering-optional-20-percent-flat-tax/#ixzz1boSybJCG