Senator Santorum has been a consistent proponent of lowering taxes. His overall theory is that lowering the tax rate is the key for attracting jobs to the US and increasing manufacturing in the nation. He opposes lopsided taxes on those that create jobs and believes that this acts as a disincentive to start and maintain businesses.
During his time in office Senatory Sentarum was a consistent supporter of the Bush tax cuts and their extensions. He voted in favor of those bills and their extensions each time they came up for a vote. He also co-sponsored one of those pieces of legislation and touts his spearheading of that bill in his campaign literature.
Senator Santorum has consitently opposed the marriage penalty, the AMT, and the death tax. In 1997, he co-sponsored legislation to end the estate tax, the gift tax, and a generation skipping tax. In 1997, he co-sponsored a bill to require a 2/3 majority in Congress for any vote that would raise taxes.
In the 2012 campaign, Senator Santorum discussed his opposition to Herman Cain's 9-9-9 plan by noting that a single person earning an income paid the same taxes as a married couple with children that earned the same amount. He noted that this was one of the problems with a fair tax. His 2012 plan mirrors these views by proposing to triple the exemption for each person and child. Currently, each household receives a deduction of roughly $3,700 of their taxable income for each man, woman, and child in the family. Tripling that rate for children would make the deduction $11,100 per child.
Senator Santorum has been vocal during the campaign in his desire to see a fairer, flatter system. He has stated that the current system punishes the individual, the small business, and the corporation. Most of his platform is consistent with this viewpoint and his history in calling for the elimination of a number of taxes such as the death tax and the AMT. The plan also calls for moving to two brackets of 10% and 28%, lowering the corporate tax rate and ending it for manufacturers in the US. He also calls for making the R&D tax credit permanent and making the rate for repatriated funds 5.25%.
2012 Tax Plan - The Santorum Solution
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;
Fox Business - Support for Bush Tax Cuts Extension
On September 7, 2010 Senator Santorum appeared on Fox Business and spoke about his support for extending the Bush tax cuts beyond the December 2010 deadline. He correctly predicted that in the end, President Obama would compromise on the Bush tax cuts and extend them all.
New Hampshire Debate
In June of 2011, Senator Santorum participated in the Presidential debate in New Hampshire. He noted the tax cuts that he was proposing to help the economy. Specifically, he notes his intention to cut the capital gains rate in half and a 5 year window where manufacturing taxes would be zero. He also proposes making the R&D tax credit permanent.
KING: OK. OK. I'll get to you in one second. I just want to show people. We're asking people watching at home also to tell us on Facebook, in Twitter what concerns them.
If you watch up here and take a look. Just look what's happened. Three most important issues this election season regardless of party, jobs, the jobless, and whether you want a job.
Senator Santorum, your state of Pennsylvania, a big industrial state that has struggled in recent years.
SANTORUM: I always am from Pennsylvania. We still make things there, and I represented the Steel Valley of Pittsburgh when I was in the Congress. And what I learned from growing up in Butler, Pennsylvania, steel town is that the broad middle of America was a broad middle of America when we had lots of manufacturing here because that's how the wealth from those who create the jobs get down.
And we've been outsourcing those jobs. So what we need to do is a lot of what was said here. I would add another thing that I'm specifically proposing. We need to cut the capital gains tax in half which others have proposed but for manufacturers we need to give a five-year window where we cut it to zero.
We want to encourage people to set up jobs here in America. Take that R&D credit, make it permanent, take that innovation and then invest that money here to create that broad middle of America and have that wealth really trickle down.
Fox News Appearance
In August of 2011, Senator Santorum appeared on Fox News and discussed numerous items that he would do to help the economy. One of the things that he cites is reducing the corporate tax rate from 35% to 0% for manufaturing in the US.
BAIER: Let's talk the economy. Let's say it's President Santorum in office right now. What specific things would you do to create jobs, increase growth, calm the markets, but with the caveat that you could get it through this divided Congress right now?
SANTORUM: You make the assumption that Rick Santorum wins the presidency, we are probably going to control the United States Senate. We're only three votes short right now, and I feel pretty good that with 23 of the 33 seats up being Democrat-held seats, we're going to pick up a few seats.
Given that as a preference, we're going to repeal Obamacare. That's the first thing. Creating a certainty in the marketplace that we're not going to put this huge new entitlement, this huge amount of taxes and burden on the business community, I think we'll do a -- go first step No. 1 to solve the problem.
Secondly, we need to do something to revitalize what I consider to be sort of the core of America, which is our manufacturing base. I've talked about this on the road really more than anybody else. I come from a little steel town north of Pittsburgh, and we believe -- I believe that if the real middle of America that has shrunk -- is because we went from about 21 percent of jobs in this country when I was a kid being in manufacturing down to 9. That's -- we lost those jobs overseas. We need to bring them back.
One big idea that I've proposed is to cut the corporate tax for all manufacturers from 35 percent to zero. You want to get jobs back in this country, you create a tax system that allows us not only to make things here and compete here and be profitable here, but one of the big impediments to manufacturing here is our tax -- our tax system doesn't match up with other tax systems around the world. As a result, it's harder to export here.
You cut the tax rate to zero, you create a real launching pad for exports here in America, so--
BAIER: But how do you -- how do you know that those companies are going to put back into the country and create those jobs if there's not something attached to it?
SANTORUM: You only get the corporate tax rate if you are manufacturing here. So I mean, it's not like you're going to cut the corporate tax for manufacturers if they manufacture in China. No, you have to manufacture here in America to get the zero percent rate. And that to me is a very, very powerful incentive.
There is other things we're going to do. Talk about energy. That's a very big part. Pennsylvania is now having a boomlet because of the Marcellus shale and the gas industry. We are going to drill 3,000 to 4,000 wells in Pennsylvania this year, gas wells. We have enormous economic activity in the rural parts of our state.
We need to do that in other areas to do two things. Number one, create jobs in the energy sector, but number two, to create a stability for the manufacturing sector. The fact that we now have stable gas prices and probably will for quite some time is a great incentive for manufacturers to come back, because they are one of the heaviest users of natural gas.
Western Debate
In October of 2011, Senator Santorum participated in the Western debate in Las Vegas. He stated his opposition to Herman Cain's 9-9-9 plan. He also talks about his tax plan that he states will allow for greater income mobility and reducing the corporate tax rates for manufacturers to zero.
COOPER: Senator Santorum, will his plan raise taxes?
SANTORUM: Herman's well-meaning, and I love his boldness, and it's great. But the fact of the matter is, I mean, reports are now out that 84 percent of Americans would pay more taxes under his plan. That's the analysis. And it makes sense, because when -- when you don't provide a standard deduction, when you don't provide anything for low-income individuals, and you have a sales tax and an income tax and, as Michele said, a value-added tax, which is really what his corporate tax is, we're talking about major increases in taxes on people.
He also doesn't have anything that takes care of the families. I mean, you have -- you have a situation where, under Herman's plan, a single person pays as much in taxes as a -- as a man and a woman raising three children. Ever since we've had the income tax in America, we've always taken advantage of the fact that we want to encourage people to -- to have children and not have to pay more already to raise children, but also pay that additional taxes -- we gave some breaks for families. He doesn't do that in this bill.
And we're going to -- we've seen that happen in Europe. And what happened? Boom, birth rates went into -- into the basement. It's a bad tax for -- again, it's bold. I give him credit for -- for starting a debate, but it's not good for families, and it's not good for low-income...
...
COOPER: Senator Santorum, does Mitt Romney have the answers for jobs?
SANTORUM: I agree with -- with all of what Governor Romney and both -- and Governor Perry said. I would add the fact that -- that I've put forward the plan that's going to allow for income mobility. That's a new term, but I've been using it for a long time, which is people at the bottom part of the income scale being able to rise in society.
Believe it or not, studies have been done that show that in Western Europe, people at the lower parts of the income scale actually have a better mobility going up the ladder now than in America. And I believe that's because we've lost our manufacturing base. No more stamp "Made in America" is really hurting people in the middle.
And that's why I focus all of the real big changes in the tax code at manufacturing. I cut the corporate rate for manufacturing to zero, repeal all regulations affecting manufacturers that cost over $100 million and replace them with something that's friendlier, they can work with. We repatriate $1.2 trillion that manufacturers made overseas and allow them to bring it back here, if they invest in plants and equipment. They can do it without having to pay any -- any excise tax.
The final point I would make to Governor Romney, you just don't have credibility, Mitt, when it comes to repealing Obamacare. You are -- you are -- your plan was the basis for Obamacare. Your consultants helped Obama craft Obamacare. And to say that you're going to repeal it, you just -- you have no track record on that that -- that we can trust you that you're going to do that.
Michigan Economic Debate
On November 10, 2011 Senator Santorum participated in the Michigan Economic Debate. He was asked about his tax plan and he discussed that and manufacturing.
HARWOOD: Senator Santorum, you proposed a zero tax on manufacturing businesses.
SANTORUM: I have.
HARWOOD: I understand the sentiment behind that. And the state of Michigan has lost hundreds of thousands of manufacturing jobs over the last few decades. Isn't that the kind of distortion in the tax code that people want to get away from in order to get rates down: flatter, simpler, fairer?
SANTORUM: I think getting the rate down to zero is down -- is pretty far down. That's good.
HARWOOD: But it's down for the manufacturing industry, as opposed to people doing other things. Isn't that picking winners and losers?
SANTORUM: It's down for a sector of the economy, not picking an individual winner or loser. It's down for an entire sector of the economy that we are getting our hat handed to us by losing jobs. We see that here in Michigan, we see it across this country. And the reason is government has made us uncompetitive.
We need to compete on taxes. We need to compete on regulations. We need to repeal Obamacare. We need to -- I've said I'm going the repeal every single Obama-era regulation that cost businesses over $100 million. Repeal them all. We'll -- we'll send a very clear message out to manufactures in this country and all over the world that America will compete.
Some have suggested we need to go into a trade war with China and have tariffs. That just taxes you. I don't want to tax you. I want to create an atmosphere where businesses and manufacturers can be profitable. We'll lower taxes, repatriating funds, 0 percent tax if you repatriate those funds and invest them in plant and equipment.
And then, of course, an energy policy that everyone on this stage is going to agree with that says, we are going to produce energy in this country. I'm different than many of them, that I'm going to cut all the subsidies out and let the market work, as opposed to creating incentives for different -- different forms of energy that the government supports.
2012 Jobs Plan
As part of his 2012 Presidential campaign, Senator Santorum proposed an economic jobs plan called the Fight for American Jobs Plan. Part of that plan was tax reform.
Tax Reform
Cut the corporate tax rate in half
Cut the tax rate to zero for all manufacturers
Permanently extend the Bush tax cuts rates for Capital Gains and Dividend Tax rates
Repeal the Death Tax
Repatriate taxable income outside the United States at a rate of 5%
Reduce the tax code for all by making the system flatter, fairer, and simpler
Creating a tax structure that does not punish, but encourages innovation and entrepreneurship
First and foremost, America must no longer have a tax regime that punishes the individual, the small business, or the corporation but encourages growth in America. Rick Santorum believes we need to reduce taxes on individuals across the board, making the system simpler, flatter, and fairer. Likewise, we must cut the corporate tax rate in half, so that we can once again be competitive with the rest of the industrialized world. However, we must go further and cut the tax rate to zero for all manufacturers irrespective of the tax paying entity so we can keep jobs in America. Manufacturing has epitomized the loss of American jobs and innovation over the past several decades, and by reinvigorating this crucial sector of our economy the multiplier effect on our entire economy will spur on economic and job growth not seen in three decades. We must also permanently extend the current Capital Gains and Dividend Tax rates, repeal the Death Tax, and repatriate taxable income outside the United States at a rate of 5% to induce job creation here in America rather than abroad. And, we must not only encourage innovation, but celebrate it by no longer holding entrepreneurs hostage year-in and year-out through the tax code's treatment of the research and development of new and promising discoveries - regardless of whether it is the next ground-breaking cancer treatment or a component for a fuel-efficient engine.
2012 Presidential Campaign Website Statements
Note: The Santorum campaign updated its tax plan not long ago. The first post is the more recent update and the second is the older position statement. This more recent statement expands on the previous plan by adding the simplification of the tax code to two rates
Defender of the Taxpayer
Rick Santorum believes that to have a strong economy, we must have strong families – because the family is the first economy. Our government must recognize this and create an environment for our families, our small businesses, and our communities to thrive. Senator Santorum believes we are a land of opportunity where all Americans have the chance to rise on their own merits and hard work. Sadly, President Obama has done just the opposite by using class warfare to divide America and limit opportunity for all.
Rick Santorum is committed to reviving our economy, restoring economic growth, and creating jobs in America again by unleashing innovation and entrepreneurship through lower and simpler taxes for American businesses, workers, and families. He also will roll back job killing regulations, restrain our spending by living within our means, and unleash our domestic manufacturing and energy potential. His vision for America is to restore America's greatness through promotion of freedom and opportunity for all. This is just the start. A plan made in America to promote America’s families and prosper its businesses.
THE SANTORUM SOLUTION
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;
During his time in public office, Senator Santorum was a strong advocate for a family and small business-friendly tax code, serving as the point man to pass the Bush tax cuts of 2001 and 2003 that revitalized our economy after the terrorist attacks of 9/11. For his work on reducing the tax burden on all Americans, Senator Santorum has received praise from groups ranging from the Club for Growth to Americans for Tax Reform and the National Federation of Independent Business.
Defender of the Taxpayer
From the moment he was elected to public office, Rick Santorum worked tirelessly to ensure the hard-earned tax dollars of all Americans were being spent wisely.
Along with John Boehner and Jim Nussle, Rick was a member of the “Gang of Seven” who targeted the waste and fraud of the House Post Office and Bank. This did not make Rick Santorum a popular man in an old boy’s club like the House of Representatives, but Rick knew that the only way to make a positive difference in the lives of his constituents was to challenge the corrupt norms that had seeped into the People’s Body.
Being elected to the upper-chamber of the United States Senate did not slow down Rick’s passion for government reform. Two of the first bills Rick sponsored were the “Balanced Budget Amendment” and the “Line Item Veto,” because Rick knew the importance of reigning in a government drunk on spending.
Rick Santorum knew that reforming Congress was a great start, but our nation’s entitlement programs were the cancer to the long-term fiscal health of our nation. This is why he was one of the lead sponsors of the landmark 1996 Welfare Reform law that has helped more Americans transition from the government welfare rolls to work than any legislation before or since.
In 2005, seeing our Social Security system on the brink of bankruptcy, Rick led the charge to reform the broken entitlement system. Along with South Carolina Senator Jim DeMint, Rick was one of only a handful of legislators who stuck their head out of the foxhole and fought to save the Social Security system for future generations by offering creative reforms focused on empowering the individual.
Rick also fought to ensure that all Americans kept more of their hard-earned tax dollars. He spearheaded the passage of President Bush’s tax cuts in 2001 and 2003, because he believes that reducing the tax burden on businesses and individuals is the key to spurring economic growth.
Since leaving Congress, Rick has been a vocal opponent of the Wall Street bailouts and stimulus programs instituted by both President Bush and Obama. Rick believes that by having our government choose winners and losers, both Administrations are setting America on a course to crony western European capitalism that will lead to a weaker future for our children.
Rick was rewarded for his hard work on behalf of the American taxpayer, consistently being named as a “Friend of the Taxpayer” by the National Taxpayers Union and endorsed by pro-business organizations like the National Federation of Independent Business and the United States Chamber of Commerce during his political campaigns.
Voting Record
Pension Protection Act of 2006
The Pension Protection Act of 2006 addressed regulations governing employer-sponsored pensions and acted to make the portions of the 2001 act which allowed higher contributions to IRAs. with the support of both parties. The bill got wide support from both parties and passed 93-5. Rick Santorum voted in favor of the Pension Protection Act of 2006.
Rick Santorum voted in favor of the Pension Protection Act of 2006.
Estate Tax and Extension of Tax Relief Act
In 2006, the senate voted on theEstate Tax and Extension of Tax Relief Act. This bill would have increased the estate tax exclusion to $5,000,000, effective 2015, and repealed the sunset provision for the estate and generation-skipping taxes. It would also have lowered the estate tax rate to equal the current long-term capital gains tax rate for taxable estates up to $25 million and repealed the estate tax deduction paid to states. The bill failed to pass in a 56-42 vote. Rick Santorum voted in favor of the Estate Tax and Extension of Tax Relief Act.
Rick Santorum voted in favor of the Estate Tax and Extension of Tax Relief Act.
Death Tax Repeal Permanancy Act
In 2006, the Senate voted on legislation that would have permanantly repealed the "Death" or Estate Tax. The legislation was rejected on a 57-41 vote. Most Republicans supported the legislation and most Democrats opposed it. Rick Santorum voted in favor of ending the Death Tax.
Rick Santorum voted in favor of ending the Death Tax.
Tax Increase Prevention and Reconciliation Act of 2005
The Tax Increase Prevention and Reconciliation Act of 2005 extended previously lowered dividend income and capital gains through 2010, and made an increase to the AMT exemption. It also eliminated income restrictions on high-income taxpayers for converting traditional Individual Retirement Accounts (IRAs) to Roth IRAs. Most Republicans supported the legislation and about 1/3 of teh Democrats supported it. The bill passed in a 66-31 vote. with the support of both parties. Rick Santorum voted in favor of the Tax Increase Prevention and Reconciliation Act of 2005.
Rick Santorum voted in favor of the Tax Increase Prevention and Reconciliation Act of 2005.
American Jobs Creation Act of 2004
The American Jobs Creation Act of 2004 allowed individuals to claim a deduction for state and local sales taxes paid, in lieu of deducting state income taxes. It also increased tax credits for business investment abroad, and temporarily increased the expensing provisions for corporations. The bill passed 69-13 ');
echo('with the support of both parties. Rick Santorum voted in favor of the American Jobs Creation Act of 2004.
Rick Santorum voted in favor of the American Jobs Creation Act of 2004.
Working Families Tax Relief Act of 2004
The Working Families Tax Relief Act of 2004 extended the 10 percent bracket on income tax created in the 2001 legislation, doubled the child tax credit, extended the previous AMT exemption and the Work Opportunity Tax Credit. The legislation was widely supported and passed 92-3. Rick Santorum voted in favor of the Working Families Tax Relief Act of 2004.
Rick Santorum voted in favor of the Working Families Tax Relief Act of 2004.
Jobs and Growth Tax Relief Reconciliation Act of 2003
In the Jobs and Growth Tax Relief reconciliation Act of 2003 tax rates on realized capital gains received by individual shareholders were reduced from 10 percent (for taxpayers in tax brackets where the ordinary income tax rate was 15 percent or below) and 20 percent (for all other brackets) to 5 percent and 15 percent, respectively, through 2007 and to 0 and 15 percent in 2008. It also adjusted the AMT exemption limit, expanded the child tax credit, and accelerated some of the earlier aspects of the previous laws. The conference report was agreed to in a 50-50 vote with most Republicans supporting it and most Democrats opposing it. Rick Santorum voted in favor of the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Rick Santorum voted in favor of the Jobs and Growth Tax Relief Reconciliation Act of 2003.
Job Creation and Worker Assistance Act of 2002
The main provision of the Job Creation and Worker Assistance Act of 2002 was to create a bonus depreciation. This bonus depreciation allowed firms to claim extra deductions for depreciation of a long-term physical capital investment during the early years. This reduces corporate profits and therefore taxes. The act got wide support from both parties and passed 85-9. Rick Santorum voted in favor of the Job Creation and Worker Assistance Act of 2002.
Rick Santorum voted in favor of the Job Creation and Worker Assistance Act of 2002.
Economic Growth and Tax Relief Reconciliation Act of 2001
The first piece of legislation was passed in 2001 as the Economic Growth and Tax Relief Reconciliation Act of 2001 The act was especially sweeping. Its two most prominent changes were a phased-in reduction in income tax rates and a reduction and eventual repeal (at the beginning of 2010) of the estate tax. It also provided a wide range of tax breaks for education, families with children, married couples, and contributions to certain kinds of savings accounts. While all republicans voted in favor of this legislation, most democrats opposed it. Rick Santorum voted in favor of the Economic Growth and Tax Relief Reconciliation Act of 2001.
Rick Santorum voted in favor of the Economic Growth and Tax Relief Reconciliation Act of 2001.
The Marriage Penalty
In 2001, an amendment was put forth to expand the 15% tax bracket and eliminate the "marriage penalty". The offset would be accounted for by reducing the marginal tax rate reductions for the top two rate brackets. The amendment was supported by most of the Democrats and opposed by most of the Republicans. The amendment failed in a 44-56 vote. Rick Santorum voted against the amendment to end the marriage penalty.
Rick Santorum voted against the amendment to end the marriage penalty.
Marriage Tax Relief Reconciliation Act of 2000
In 2000, the senate attempted to pass the Marriage Tax Relief Reconciliation Act of 2000. This act would have ended the marriage penalty by adjusting the 15% tax bracket accordingly. Most Republicans supported the act and most Democrats opposed it. The act passed the senate in a vote. The bill was eventually vetoed by the President. Rick Santorum voted in favor of the Marriage Tax Relief Reconciliation Act of 2000.
Rick Santorum voted in favor of the Marriage Tax Relief Reconciliation Act of 2000.
Makes permanent: (1) reductions in individual income tax rates enacted by the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA); (2) reductions in individual capital gains and dividends tax rates enacted by the Jobs and Growth Tax Relief Reconciliation Act of 2003; and (3) the repeal of the estate and generation-skipping transfer taxes and reductions of the gift tax enacted by EGTRAA.
Requires a two-thirds vote of each House of the Congress in order to pass any bill levying a new tax or increasing the rate or base of any tax. Allows the Congress to waive that requirement during war or certain military conflict. Requires all votes under this Amendment to be by yeas and nays and the names of persons voting for and against to be entered in the Journal of each House.
