Rand Paul on Stimulating Jobs by Leaving More Money in the Economy Through Flat Tax

“I'm of the opinion that the way you stimulate the economy and the way you create jobs is by leaving more money in the economy. You may say that sounds incredibly simplistic, but it's true. The private economy creates jobs.” U.S. Senator Rand Paul spoke at UC Berkeley on March 19, 2014. The event was hosted by the Berkeley Forum student organization. Watch the entire event here: UC Berkeley Campus Life

Transcript:

Next question from the audience:

You have voiced support for a flat tax system. Are you concerned about potential increase in inequality resulting from such a system?

Rand Paul:

One of the interesting things is some other wealthy pay no taxes. Some of the corporations - wealthy corporations, pay no taxes under the current system. Another interesting fact on over the last five years income equality has gotten worse, even though we've raise tax rates. So it is something you have to kind of think through as far as how you wanna make it better.

I'm of the opinion that the way you stimulate the economy and the way you create jobs is by leaving more money in the economy. You may say that sounds incredibly simplistic, but it's true. The private economy creates jobs. We have to have a certain amount of government, but we should minimize the size of government because it's not very good at stuff.

I'll often say it's not that government is inherently stupid, although it's a debatable point, is that they don't get the same signals. So for example, we need our national defense and it can be done privately. Same with the judiciary, the legislative branch, and roads, in education, and things like this where the government will be involved. So I think you can argue that that should occur but we should keep it and not expanded to all walks life. Does the governed need to sell pizza? You know, does the government need to deliver the mail? That's really a problem, they probably shouldn't be delivering the mail. They are not good at that either, but … We should minimize what government does and try to maximize the private sector. And that's I think where jobs are created. But to me though, it's getting beyond the hurdle.

I can go to a poor community in the mountains of eastern Kentucky and I'll say bring me the 10 richest people in your town because I would like to reduce their taxes. And may be horrified and say oh he cares only about rich people. No, we all work for rich people. So I want the people who own the business, the guy who owns a business in Middlesboro Kentucky who employs a hundred people, is probably the richest guy in town, how am I going to get him or her to hire a hundred and ten people? Reduce our taxes.

So we gotta get over this class warfare that rich people are bad people. The top one percent pay forty percent of the income tax. There are some exceptions to the rule and we should fix the exceptions. Meaning that is there are some in the top one percent that aren't paying taxes, they should. In some ways a flat tax accumulates more of those people and you lose of less those people by having less deductions and having a flatter, simpler code. But I'm also for reducing everyone's taxes, not just the middle class. Everyone's taxes.

Translated by: Jadranko Brkic