Rick Perry introduces flat tax (VIDEO)

Republican presidential candidate Rick Perry unveiled his plan Tuesday to reform the U.S. tax code. Perry's plan includes an optional flat tax, spending cuts, tax cuts and efforts to balance the federal budget.

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The Washington Post reports that Perry's plan would "dramatically reduce taxes, particularly on wealthy Americans and corporations."

It would reduce the corporate tax rate from 35 to 20 percent, eliminate taxes on dividends and many capital gains and essentially cap individual tax rates at 20 percent. Perry argues these tax cuts will spur economic growth by creating a more favorable environment for wealthy individuals and corporations to start or expand their businesses.

Perry's plan positions the candidate to the right of former Massachusetts Gov. Mitt Romney in terms of economic policy, it states.

The plan is intended to simplify the tax code so Americans can "file their taxes on a postcard."

Perry introduced his plan in an op-ed in the Wall Street Journal. He also discussed it during a speech Tuesday in South Carolina, BBC reports.

"Cut, Balance and Grow strikes a major blow against the Washington-knows-best mindset. It takes money from spendthrift bureaucrats and returns it to families. It puts fewer job-killing regulations on employers and more restrictions on politicians. It gives more freedom to Americans to control their own destiny. And just as importantly, the Cut, Balance and Grow plan paves the way for the job creation, balanced budgets and fiscal responsibility we need to get America working again," Perry writes.

Perry, the governor of Texas, has been slipping in the polls and trying to reinvigorate his campaign.

A CBS/NY Times poll Tuesday found that Herman Cain has taken the lead among the GOP candidates. According to the poll, Cain garnered 25 percent of the vote, Romney received the second highest amount of voters with 21 percent and Perry was in fifth place with 6 percent of the vote.

Perry is using different methods to try to fight back, including calling Romney a "fat cat."

In an interview with John Harwood of CNBC and the New York Times on Tuesday, Perry said that Romney should not attack him on the flat tax plan, CBS News reports. If he does, Perry said, Romney, "ought to look in the mirror. I consider him to be a fat cat."