“Simplify The Personal Income Tax Code And Lower Rates. Rather than nibble around the edges of the existing tax code, Gov. Huntsman will introduce a revenue-neutral tax plan that eliminates all deductions and credits in favor of three drastically lower rates of 8%, 14% and 23%. Eliminating deductions and credits in favor of lower marginal rates will yield a simpler and more efficient tax code, decreasing the burden on taxpayers…
“Eliminate The Taxes On Capital Gains And Dividends In Order To Eliminate The Double Taxation On Investment. Capital gains and dividend taxes amount to a double-taxation on individuals who choose to invest. Because dollars invested had to first be earned, they have already been subject to the income tax. Taxing these same dollars again when capital gains are realized serves to deter productive and much-needed investment in our economy.
“Reduce The Corporate Rate From 35% To 25%. The United States cannot compete while burdened with the second-highest corporate tax rate in the developed world; American companies and our workers deserve a level playing field. With high unemployment, it is important that we not push corporations and capital overseas. We need employers to be based in America if they’re going to provide jobs to Americans.”
“Current polls say Jon Huntsman, former Utah governor and ambassador to China, isn’t a top tier candidate for the 2012 Republican presidential nomination. But he certainly has a top-tier economic plan. Huntsman will offer a broad proposal later today – covering taxes, regulation, trade and energy. But I already had a peek at the tax part. And I think it is excellent…
“At first glance, this looks like perhaps the most pro-growth, pro-market (and anti-crony capitalist) tax plan put forward by a major U.S. president candidate since Ronald Reagan in 1980. But it is not without political risk. In addition to killing tax breaks for businesses, Huntsman would eliminate the mortgage interest deduction, healthcare exclusion, and the child tax credit among other “tax expenditures. ” We’re talking about a whole herd of sacred cows. Both his fellow presidential candidates and Washington lobbyists will likely attack him for some of those ideas.”
“In order to infuse predictability and certainty into the marketplace – which it doesn’t have today and therefore it has no confidence and therefore you don’t have business employing and you don’t have business releasing capital expenditures into the marketplace — you have to get certainty in terms of tax reform. We’re going to lower rates [23 percent, 14 percent, 8 percent and a zero capital gains rate] with three brackets and an income tax return that would resemble a post card. This is reminiscent of what I did as governor where I actually created something close to a flat tax where we worked to eliminate all the deductions and loopholes.
“So I am premising both individual and corporate tax reform [with a top rate lowered to 24 percent] on clearing the cobwebs out. You pay for it by eliminating corporate welfare, by phasing out subsidies and loopholes and deductions. My goal would be to phase out everything on the corporate side and the individual side. I know that is controversial. I know there is a political risk there. But that is the only way you can raise the revenue to buy down the rates. There ‘s no other way to pay for it. When I was governor it took us two years, we brought both parties together and we got it done. So I am coming at this exercise as probably the only person in the race who’s actually been through this effort before.”
“But here’s the problem. The tax code, when combined with entitlements as now structured, overtaxes parents, and the child credit only partially offsets that effect. By abolishing the credit–a legacy of the Gingrich Congress and the Bush administration–Huntsman would be taking a step away from neutrality and toward a perverse form of social engineering.
“And while we don’t know all the details it seems highly likely that the net result would be a higher tax bill for most middle-class parents, also known as Republican voters. Attacking the financial interests of your own side’s voters is praiseworthy only if it is in the service of good policy.”