Ky. senator says low, flat tax could help Detroit

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Associated Press

Posted on December 5, 2013 at 11:02 PM

DETROIT (AP) — A Republican senator from Kentucky who may run for president is traveling to bankrupt Detroit to preach a message of lower tax rates.

Rand Paul told reporters Thursday that a flat tax of 5 percent in neighborhoods with unemployment above the national figure would be the right tonic for Detroit and other struggling areas of the country. He speaks Friday at the Detroit Economic Club.

"We need something dramatic to happen," Paul said in a conference call.

Paul is considering a run for the Republican nomination for president in 2016. He has been firmly opposed to any federal bailout for Detroit, but no one is proposing such relief.

Paul said he wants to create "economic freedom zones" with personal and business taxes at a flat rate of 5 percent in certain neighborhoods. Social Security taxes also would be lower and capital gains taxes would be zero.

He also wants Congress to change the rules for certain immigrants to settle in Detroit if they have plans to create jobs.

"We hope to create taxes so low you essentially are able to bail yourselves out," Paul said.

Detroit this week was found eligible to stay in bankruptcy court and come up with a plan to get rid of $18 billion in debt. Downtown Detroit and neighborhoods near the Woodward Avenue corridor are doing well, but other pockets of the city are overwhelmed by poverty, blight and population loss.

Paul said he wants people to keep more of their money and help cities prosper.

"I think the real key is . the money is going into the hands of the individuals who basically earned it," he said.

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