The central issue for this presidential cycle is restoring economic growth and prosperity, which has continued to lag under President Obama for nearly seven years now, the longest period of such stagnation since the Great Depression. Central to such restoration is tax reform. Rand Paul has barnstormed into the lead on that issue, with his bold, pathbreaking, Fair and Flat Tax plan, just recently released.

That plan includes just one flat rate, 14.5 percent, for everything: wages, salaries, profits, dividends, capital gains, interest, rent. Everyone pays the same rate. Capitalist billionaires will not pay lower rates than their secretaries, or kindergarten teachers. This is exactly what the Democrats have been insisting they want: Equality.

For most working people, the payroll tax has become a bigger burden than income taxes. But under Rand Paul’s “Fair and Flat Tax,” the payroll tax is zeroed out for all families and replaced by the 14.5 percent rate on all wages and salaries, supplanting both income taxes and payroll taxes. The plan also includes a $15,000 standard deduction per filer ($30,000 per married couple) and a $5,000 personal exemption per family member, which means the first $50,000 is tax exempt for a family of four.

America suffers under the highest corporate income tax rate in the developed world. But under Rand Paul’s Fair and Flat Tax, the corporate income tax is abolished, and all business and capital income is taxed under the same 14.5 percent rate for all businesses – conventional C corps, pass through S Corps, LLCs, partnerships, sole proprietorships. All capital expenditures would be immediately deductible, or “expensed,” just like wage expenses, which means all depreciation schedules would be abolished.

All special interest, “corporate welfare” loopholes would also be abolished, as would individual deductions, except for mortgage and charitable deductions. The current Earned Income Tax Credit and Child Tax Credit, which benefit the poor and lower income workers, would be retained. The plan would abolish entirely estate (death) taxes, and gift, telephone, and Internet taxes.

The business tax would be territorial, which means foreign businesses would be taxed here for what they earn in the U.S., while American businesses would be taxed only overseas, not in the U.S., for what they earn overseas. Consequently, the plan’s business tax does not tax goods produced in America for export overseas, but does tax goods produced by foreign businesses overseas and imported into America. That strongly favors blue collar American workers, particularly in manufacturing, but does not violate international trade treaties (as this is standard practice in tax systems worldwide). The plan does advance free trade by eliminating any remaining American tariffs and duties.

Because of its much lower tax rates and burdens, Senator Paul’s reform is powerfully pro-growth, encouraging greater savings and investment, the foundation for the creation of new jobs. For the same reasons, the plan encourages the formation of new businesses and the expansion of existing ones.

The resulting increased demand for labor is what leads to higher wages and incomes for working people. The resulting business expansion produces greater returns and profits for savers and investors. The end result is higher economic growth, and higher GDP and national income for everyone contributing to the economy.

The plan is not designed to be revenue neutral, but a major tax cut, because Rand Paul is running for president to make the federal government smaller, not to finance the same overgrown, federal Leviathan as today. The Tax Foundation, which scored the tax reform plan under its comprehensive, new macroeconomic model, in accordance with the new House rule to score all tax proposals “dynamically,” estimates 2 million new jobs would be created under the plan. GDP would grow by 10 percent, producing $2.5 trillion more in higher output and incomes. Spectacularly, wages and incomes for middle class workers and families would grow by 14-15 percent.

With this booming economy, the Tax Foundation estimates this plan would reduce federal revenues by only $100 billion a year on average over the first 10 years. That is just 2.5 percent of what President Obama proposes to spend next year. With such economic growth as the foundation, our bloated, overgrown, federal budget can not only be balanced but in surplus within 10 years. Congratulations to Rand Paul’s economic team of Steve Moore, Art Laffer, and Steve Forbes, who helped develop this pathbreaking reform plan.

Lew Uhler is the Founder and Chairman of the National Tax Limitation Committee, and the National Tax Limitation Foundation (NTLF). Peter Ferrara is a Senior Policy Advisor to NTLF and a Senior Fellow at the Heartland Institute. He is the author of the recent Power to the People: The New Road to Freedom and Prosperity for the Poor, Seniors and Those Most In Need of the World’s Best Health Care, published by Heartland.