Sen. Rand Paul, R-Ky., is opening a Michigan Republican Party outreach office Friday in Detroit. Ahead of his visit he offered a plan he says could return the bankrupt city to its former glory.
"Instead of saying the free market floats all boats, we have to come in with plans," Paul told reporters during a Thursday conference call.
His plan: A 5 percent flat federal tax rate for individual and corporate incomes and a 0 percent capital gains tax rate in economically depressed areas.
That would give Detroit a competitive edge, Paul says. The likely 2016 presidential candidate said he will introduce legislation to create special low-tax areas in ZIP codes where unemployment is more than 50 percent higher than the national average.
"We want people with capital to move and start businesses in Detroit," Paul said.
The senator said he's discussing his plan with anyone willing to hear him out, but also noted some opposition.
"They like the traditional model that I think hasn't worked," he said. Skeptics, Paul noted, prefer to heavily tax "the successful people and give it to the unsuccessful people."
U.S. Bankruptcy Judge Steven Rhodes ruled Tuesday that Detroit can proceed with Chapter 9 bankruptcy proceedings designed to trim its debt. The city has an unemployment rate of more than 17 percent, according to the Bureau of Labor Statistics. The national unemployment rate was 7.3 percent in October.
Paul is actively courting African-American voters. In April he visited the historically black Howard University, where he discussed his support for reducing federal penalties for drug possession and for easing the ability parents to pull their children from low-quality public schools. In 2010 nearly 83 percent of Detroit's 714,000 residents were African-American, according to the Census Bureau.