Governor Huntsman has introduced an economic plan called the "Time to Compete" plan as part of his 2012 Presidential campaign. Tax reform is one of the major components of that plan and Governor Huntsman claims that his plan is revenue neutral. The plan consists of removing all incentives and deductions, creating three new brackets of 8%, 14%, and 23%, and lowering the corporate tax rates from 35% to 25%.
Simplify the tax code
Eliminate all tax credits and tax deductions
Create 3 brackets of 8%, 14%, and 23%
Eliminate the AMT
Eliminate the tax on capital gains and dividends
Lower corporate rates from 35% to 25%
TEA Party Debate
Governor Huntsman participated in the TEA party debate in September of 2011. He speaks about his tax plan to move to three brackets.
QUESTION: Hi. My name is Tyler Hensley (ph). I'm from Napa, California. My -- well, first of all, thank you guys for coming out tonight. My question is, out of every dollar that I earn, how much do you think that I deserve to keep?
BACHMANN: Oh, I love that question. I love that question.
(APPLAUSE) (CROSSTALK)
BLITZER: Governor Huntsman?
HUNTSMAN: Well, I've come out with a tax program that basically simplifies, lowers, flattens the rate, why? Because I did it as governor in the state of Utah; I believe that that experience means something.
And I look at people who are earning, you in the workplace, trying to make ends meet. You ought to be given a competitive tax code. We need to clear out the cobwebs. We need to clear out the deductions, the loopholes, the corporate welfare, and all the subsidies. And for you, you know, we leave it at 8 percent, 14 percent, 24 percent. Those are the three rates that I think would work on the individual income side. On the corporate side, I think we recognize the reality that a whole lot of companies can afford to have lobbyists and lawyers on Capitol Hill working their magic. Let's recognize the reality that they're all paying 35 percent. We need to lower that to 25 percent. So let's phase out the corporate subsidies and clean out the cobwebs and leave it more competitive for the 21st century.
I can tell you, by doing that with our tax code -- and I know, because we did it in a state that took us to the number-one job creator in this country -- it will leave you and your generation a whole lot better off.
But the thing that you all need to be worried about is the debt that is coming your way, because we have a cancer that is eating away at the core of this country called debt. And it's going to eat -- eat -- eat alive this country until your generation gets active in the 2012 election cycle and finds a leader who can address debt and growth.
Time to Compete Plan
Governor Huntsman has proposed the "Time to Compete" plan for the economy as part of his 2012 Presidential campaign. The plan includes tax reform and conssits mainly of removing al deductions and tax credits and creating 3 brackets of 8%, 14%, and 23%.
Tax Reform
The tax reform portion of Governor Huntsman's plan consists of four items. First, Governor Huntsman wants to simplify the tax code by eliminating all deductions and tax credits. This would include the mortgage deduction. To offset these increases, the plan would create 3 lower tax brackets of 8%, 14%, and 23%. Governor Huntsman claims that the plan would be revenue neutral and that increases due to the loss of deductions and credits would be offset by the lowered rates. Next, the Alertnative Minimum Tax (AMT) would be eliminated, as well as the taxes on capital gains and dividends. Governor Huntsman notes that because taxes are paid on any income, that money should not be double-taxed when it is used later. Finally, Governor Huntsman proposes reducing the corporate tax rates from 35% to 25%.
Simplify the tax code
Eliminate all tax credits and tax deductions
Create 3 brackets of 8%, 14%, and 23%
Eliminate the AMT
Eliminate the tax on capital gains and dividends
Lower corporate rates from 35% to 25%
Fox News / Google Debate
On September 22, 2011 Governor Huntsman participated in the Fox News / Google debate. He spoke there about his support for natural gas and subsidization of certain renewable energy products.
MEGYN KELLY, FOX NEWS: Governor Huntsman, this next one's for you. This week, President Obama proposed a tax hike on millionaires, saying that they need to pay their, quote, "fair share." According to an August Gallup poll, 66 percent of American adults actually believe that a tax hike on the wealthy is a good idea to help tackle our mounting debt. Is there any scenario under which you could side with the 66 percent of people who believe that it is a good idea to raise taxes on millionaires?
FORMER GOV. JON HUNTSMAN, R-UTAH: We're not going to raise taxes. This is the worst time to be raising taxes, and everybody knows that. (APPLAUSE)
We need to grow. We need to be reminded of what Ronald Reagan told us so beautifully, that which is great about America, freedom. We need to re-establish freedom in the marketplace. We need to address our underlying structural problems that we have.
And in order to do that, we're going to have to fix our taxes. And we put forward a program endorsed by the Wall Street Journal that phases out for individuals all the loopholes, all the deductions, and creates three rates, 8, 14, 23.
On the corporate side, it phases out all of the corporate welfare, all of the subsidies, and it gets it from 35 percent to 25 percent.
This is exactly where we need to be. We need to grow; we need to create jobs. This is not a point in time where we should be raising taxes.
We need to fix the underlying structural problems in this economy.
And until such time as we do, we're not going to provide the confidence to businesses who are looking to deploy capital in the marketplace and hire people. And that would be serious tax reform, like I proposed, and like I did in the stay of Utah, and that would be -- that would be structural reform, as well, dealing with Dodd-Frank, and repealing Obamacare, because they are presenting tremendous uncertainty to the marketplace right now.
Dartmouth Debate
In October of 2011, Governor Huntsman participated in a debate at Dartmouth on the economy. In that debate, he notes his views on the overall economy and the relation to taxes.
ROSE: And so what would you do about that to change that, to attract those kind of people so that they would be willing to serve a cross-section of people from every gender...
HUNTSMAN: Let’s get back to what we did a generation or two ago, when we were more open in terms of accommodating people from all backgrounds who wanted to take a little bit of their life and serve in government, and then leave, and go back to what it is they did best, whether on the farm, or whether insurance, or whether business, or whether academia.
ROSE: When you mention a flat tax, does that mean that you look with some favor upon 9-9-9 that Herman Cain mentioned at the beginning of this conversation?
HUNTSMAN: I think it’s a catchy phrase. In fact, I thought it was the price of a pizza when I first heard about it.
ROSE: Price of a pizza?
HUNTSMAN: Well, here’s - here’s - here’s what - here’s what we need. We need something that’s doable, doable, doable. And what I have put forward is a tax program that is doable. It actually wipes clean all of the loopholes and the deductions.
This is right out of what the Simpson-Bowles Commission recommended, a bipartisan group of people that took a thoughtful approach to tax reform.
ROSE: Corporate and individual?
HUNTSMAN: Individual, and on the corporate side, phase out all of the corporate welfare, all of the subsidies, because we can’t afford it any longer, in a revenue-neutral fashion, buy down the rate from 35 percent to 25 percent, leveling the playing field for businesses big and small, allowing us to be a whole lot more competitive in the second decade of the 21st century.
Michigan Economic Debate
On November 10, 2011 Governor Huntsman participated in the Michigan economic debate. He spoke about his support for a flat tax.
SANTELLI: Our federal government still owns 500 million shares of GM stocks, guarantees trillions -- trillions with a "T" -- dollars of mortgages. They are basically the lender doing 90 percent of all the mortgage origination right now. And you consider the Federal Reserve, the Federal Reserve has purchased $2.62 trillion -- again, with a "T" -- of treasury securities, agency securities, and mortgage securities.
If you were president, how would your administration and would your administration reverse these obligations?
HUNTSMAN: I would clean up the balance sheet. And let me tell you what I worry about as much as anything else.
We talk about failed leadership. We certainly have failed leadership.
President Obama had two years to get this economy going and to move us toward an environment that speaks to job growth, and he's failed miserably. But along with that, we have a real trust crisis in this country.
Between the American people and our institutions of power, Congress, the executive branch, Wall Street as well, there is no trust. We are running on empty. And when a democracy begins to run on empty because of government holdings and bailouts and being involved in ways that are absolutely inappropriate, based on constitutional and where we should be, that results in a diminution of trust by the American people. We've got to raise that trust.
So let me just tell you what I think needs to be done, in terms of bringing our economy up. We've heard about all these great tax plans. I think I'm the only one on this stage who's actually delivered a flat tax. And I did that as governor of my state.
I put forward a proposal that I think is right for this country and getting it back on its feet. The Wall Street Journal has come out -- the most respected editorial page economically, maybe in the entire world -- has come out and endorsed my plan, said it's the very best of the bunch.
And it very simply calls out just as I did as governor. So I'm not sitting here talking about academic theory. I stand here as a practitioner. I've done it before. I want to phase out the loopholes and the deductions on the individual side, phase out corporate welfare and subsidies on the corporate side, and lower the rates, make us more competitive. That's the kind of work that is realistic. It can get done in Congress and fire the engines of growth that are so desperately needed to boost trust in this country.
2012 Campaign Website Statements
TIME TO COMPETE An American Jobs Plan
Tax Reform
Governor Huntsman supports comprehensive reform to make America's tax code flatter, fairer, simpler and more conducive to growth.
Over the last 25 years, our tax system has devolved into a maze of credits, deductions, loopholes and temporary provisions, which create fiscal uncertainty and hinder America's competitiveness. American businesses suffer from the second-highest corporate tax rate in the developed world. High marginal rates also negatively impact small businesses, many of which file as individuals. These rates must be reduced for America to compete in the 21st Century economy.
Governor Huntsman's proposals are modeled after Ronald Reagan's 1986 tax reform package, which economist Dale Jorgenson calculated as yielding over one trillion dollars in efficiency gains.
A PROVEN RECORD
On tax reform, Governor Huntsman offers more than rhetoric; he also offers a record of results.
In Utah, he signed the largest tax cut in state history, returning $400 million to families and businesses and earning him the "Taxpayer Advocate" award from the Utah Taxpayers Association.
The Cato Institute called Huntsman's tax reform plan in Utah "very Reaganesque" and gave him an "A" in tax policy.
Along with historic tax cuts, Huntsman also balanced every budget and tripled the state's rainy day fund, leading the Pew Center to name Utah the best-managed state in America.
Huntsman's reforms helped Utah lead the nation in job creation under his leadership.
TAX REFORM PROPOSALS
Individual Taxes
Simplify the Personal Income Tax Code and Lower Rates Gov. Huntsman supports a version of the plan crafted by the Fiscal Commission, headed by Erskine Bowles and Alan Simpson, commonly known as the "zero plan". Rather than nibble around the edges of the existing tax code, he will introduce a revenue-neutral 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 Alternative Minimum Tax Under the new simplified plan, Governor Huntsman will eliminate the Alternative Minimum Tax, which is not indexed for inflation and is penalizing an increasing number of families and small businesses. This tax is especially burdensome on the majority of small business owners who file as individuals.
Corporate Taxes
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. Governor Huntsman will lower the corporate tax rate to the average of other OECD nations. 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.
Shift from a Worldwide System of Taxation to a Territorial System We are one of the last countries taxing businesses on worldwide income and punishing businesses that bring money home. Shifting to a territorial system will allow American companies to compete with other global players and allow US-based multinationals to bring capital home to invest in new jobs.
Implement a Tax Holiday for Repatriation of Corporate Profits A tax holiday for repatriation of corporate profits earned overseas will make available between $400 billion and $600 billion for companies to make capital investments. This is a critical tool in creating a pro-growth business environment that will get Americans back to work.
Capital Gains and Dividends
Eliminate the Taxes on Capital Gains and Dividends In Order to Eliminate the Double Taxation on Investment Eliminating taxes on capital gains and dividends would lower the cost of capital and encourage investment in the American economy to create jobs. Additionally, these taxes amount to a double- taxation on most individuals who choose to invest since they first had to earn that money and pay income tax on it. Taxing these same dollars again when capital gains are realized serves to deter productive and much-needed investment in our economy.
