Paul says his economic plan is the only hope for depressed
areas such as Detroit
Paul (Manuel Balce Ceneta / Associated Press)
Washington — Kentucky U.S. Sen. Rand Paul unveiled Thursday his plan to save Detroit two days after a judge officially declared the Motor City bankrupt.
Paul, widely considered a 2016 potential presidential candidate, said he will introduce legislation Monday to create “economic freedom zones” by dramatically lowering taxes in depressed areas and loosen visa rules to encourage foreign entrepreneurs to immigrate to the city.
“We hope to create taxes so low you essentially are able to bail yourselves out,” Paul said Thursday in a conference call outlining his plan.
Paul travels to Detroit today for a speech detailing his Motor City ideas before the Detroit Economic Club and for the opening of a new GOP office in the city.
Paul, a libertarian-leaning senator, has advocated for the Republican Party to widen its tent to traditionally Democratic areas by bringing fresh ideas.
Paul famously said earlier this year Detroit would receive a federal bailout “over my dead body.”
He has since said he regrets the word choice, but believes his plan not only is politically feasible in Washington’s anti-bailout culture but will be more effective than a government stimulus by leaving money in the city of Detroit.
The economic freedom zone is an updated, more aggressive version of “enterprise zones” that conservatives like U.S. Rep. Jack Kemp advocated during the 1980s and 1990s to spur economic growth in depressed urban areas.
Under the Paul plan, individual income and corporate income taxes would be slashed to a flat rate of 5 percent in pockets of the country with unemployment more than 1.5 times higher than the national average. Payroll taxes would also be lowered and capital gains taxes would disappear.
In addition, the income requirement for entrepreneurial immigrants would be reduced to $50,000 to encourage people from around the world to move to Detroit. Gov. Rick Snyder has advocated attracting more immigrants to Michigan as a way of helping to revitalize the state.
The Paul plan faces long odds of getting a vote in the Democratic-led Senate or gaining approval in a Congress that has trouble approving many legislative initiatives.
U.S. Sen. Carl Levin, D-Detroit, said he appreciates Paul’s ideas but believes tax incentives need to be accompanied by investments.
“I welcome ideas about how to address Detroit’s challenges, and while I don’t agree with much, and probably most, of Senator Paul’s proposal, there are some aspects that could be helpful,” Levin said in a statement.
“For instance, targeted tax incentives, or removing tax disincentives for those who live or work in the city, could help as part of a strategy for Detroit’s future.
“However, no plan can succeed unless it includes investments in public services and infrastructure, like education and neighborhood renovation, to help build a foundation for a safe and prosperous community.”
Paul hopes his plan would be more successful than previous enterprise zone initiatives by getting governors on board to lessen the local tax burden, too.
Paul is holding off until his speech Friday on how much he estimates the Motor City would capture under the 10-year plan but said: “It adds up. It becomes a significant amount of money over time. I think the real key is … the money is going into the hands of the individuals who basically earned it.”
mschultz@detroitnews.com
(202) 662-8736
(202) 662-8736
From The Detroit News: http://www.detroitnews.com/article/20131205/POLITICS03/312050086#ixzz2mvU50QBG
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