Taxing Questions

Jan 18, 2012 - NEWS
There has been a great deal of effort recently to force Americans to come the shocking realization that Mitt Romney is wealthy. One of those efforts involves getting him to release his tax records so that Americans can see that almost all of his income comes from investments made decades ago and that this causes him to pay taxes at rates lower than if it were traditional income. Even though a number of Democrats have attempted to get people to believe that Republican tax policy is to shaft middle America and reward the 1%, reality is less interesting.
 
Governor Romney
If the Republican candidates were authors, Mitt Romney would be Stephen King. Everything that he writes is very, very long and when you're done with it, you realize that the same story could have been told with half the words. Still, the willingness of Governor Perry to put such a specific plan in place, just as he did in 2008, is one of the reasons he is leading the race.
Governor Romney's 2008 tax plan promised a specific set of tax cuts for individuals and businesses that mirrored his statements in debates and op-eds. The pledges included:
  • Permanently Reduce The Lowest Income Tax Bracket to 7.5%
  • Permanently Eliminate Payroll Taxes On Employees Over The Age Of 65
  • Make Middle-Class Savings Tax Free
  • Make the Bush Tax Cuts permanent
  • End the Death Tax
  • Patch or permanently end the AMT
  • Make The Research And Development Tax Credit Permanent
  • Oppose Any Increase In Social Security Taxes
  • Reduce The Corporate Tax Rate To 20% Over Two Years
Governor Romney's 2012 tax plan is less specific. The plan calls for the elimination of the estate tax, the lowering of the corporate tax rate to 25%, and making the Bush tax cuts permanent. However, beyond that it promises only a flatter system with corporate taxes moved to a territorial system.
  • Individual Taxes
    • Maintain marginal rates at current levels
    • Further reduce taxes on savings and investment
    • eliminate the death tax
    • Long term goal - pursue a flatter, fairer, simpler structure
  • Corporate Taxes
    • Lower the corporate income tax rate to 25%
    • Transition to a "territorial" tax system
 
Newt Gingrich
Although he did not seek office in 2008, Speaker Gingrich has remained active in politics and began to advocate for an optional flat rate tax that people would be able to opt into if they desired. He placed the level of taxation at around 17% for all people and corporations. He claimed that roughly 42% of the nation would pay no taxes under this system. Congressman Gingrich has proposed a 15% optional flat tax as part of his 2012 tax platform. As part of this system, he also proposed replacing the current $3,700 tax exemption with  a $12,000 one.
Speaker Gingrich has consistently argued throughout the 2012 campaign that the capital gains tax should be ended and that the corporate tax rate should be reduced by half. His 2012 tax plan mirrors these ideas.
  • Stop the 2013 tax increase to promote stability in the economy (The expiration of the Bush tax cuts)
  • Make the United States the most desirable location for new business investment through a bold series of tax cuts and regulatory reforms, including:rn
    • Eliminating the capital gains tax to make American entrepreneurs more competitive against those in other countries;
    • Dramatically reducing the corporate income tax (the highes in the world) to 12.5%;
    • Allowing for 100% expensing of new equipment to spur innovation and American manufacturing;
    • Ending the death tax permanently.
  
Congressman Paul
On of the chief problems with Congressman Paul's platform is that he has not proposed a specific tax plan. He states that he would reduce the size of government enough to no longer require the income tax. However, he does not state how he would handle that transition or how he would handle payment of the debt.
  
Senator Santorum
Senator Santorum's plan involves simplifying the tax code by using just two rates of 10% and 28%. He does not qualify those rates by saying where the cut off points for those rates would be. His plan shares one component with Speaker Gingrich's plan in that Senator Santorum proposes tripiling the child deduction to $11,100 as compare for Gingrich's propoped $12,000.
  • Cut and simplify personal income taxes by cutting the number of tax rates to just two - 10% and 28% and return to Reagan era pro-growth tax rate;
  • Simplify the tax code and reduce middle income taxes by eliminating the Alternative Minimum Tax (AMT);
  • Simplify the tax code, encourage savings and investment, and reduces taxes by eliminating the Death Tax;
  • Lower the Capital Gains and Dividend tax rates to 12% to spur economic growth and investment;
  • Reduce taxes for families by tripling the personal deduction for each child;
  • Reduce and simplify taxes for families by eliminating marriage tax penalties throughout the federal tax code;
  • Retain deductions for charitable giving, home mortgage interest, healthcare, retirement savings, and children;
  • Eliminate the cap on deductions for losses incurred in the sale of a principal residence;
  • Cut the corporate income tax rate in half to make our businesses competitive around the world, from 35% to 17.5%;
  • Eliminate the corporate income tax for manufacturers to spur middle income job creation in the United States and benefit from the job multiplier effect in manufacturing;
  • Increase the Research & Development Tax Credit from 14% to 20% and make it permanent to spur on innovation in America;
  • Eliminate the tax on repatriated taxable corporate income invested for manufacturers equipment investment, 5.25% corporate tax rate on other repatriated income invested in the USA, and 100% expensing for new business equipment;

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