Rand Paul’s “Change-of-Heart” Over Detroit Bankruptcy

Sen. Rand Paul speaks to the Detroit Economic Club
Sen. Rand Paul speaks to the Detroit Economic Club

Detroit, MI – Having said Detroit would receive a federal bailout “over my dead body,”  Sen. Rand Paul (R-KY) addressed the Detroit Economic Club Dec. 5, where he unveiled his plan to save Detroit two days after a judge officially declared the Motor City bankrupt.

Paul, who considers himself a 2016 potential presidential candidate, said he will introduce legislation to create “economic freedom zones” by lowering taxes in depressed areas, and loosen visa rules to encourage foreign entrepreneurs to immigrate to the Motor City.

“This isn’t just about Detroit,” said Paul. “I’m a politician, so I’m also concerned about my home. It would also include many in my home state,” he said, adding that there are 20 counties in the eastern part of Kentucky that are in a depression. “So this would be struggling communities all across America.”

“To thrive, Detroit needs less government and more freedom, less red tape, less punitive taxes, more money left in Detroit. The answer to poverty and unemployment is not another government stimulus. It’s simply leaving more money in the hands of those who earned it,” Paul said.

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.

Paul, a libertarian-leaning senator, has advocated for the Republican Party to widen its reach to traditionally Democratic areas by bringing in fresh new ideas. Under the “Paul Plan,” individual income and corporate income taxes would be slashed to a flat rate of 5% in pockets of the country with unemployment more than 1.5 times higher than the national average.

Gov. Rick Snyder has advocated attracting more immigrants to Michigan as a way of helping to revitalize the state. 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.

U.S. Sen. Carl Levin, D-Detroit, said he appreciates Paul’s ideas but believes tax incentives need to be accompanied by investments—in other words, putting money where your mouth is.

“I welcome ideas about how to address Detroit’s challenges,” said Levin. “While I don’t agree with much, and probably most of Senator Paul’s proposal, there are some aspects that could be helpful, like 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 to help build a foundation for a safe and prosperous community,” concluded Levin.