Skip to comments.Tax Foundation Rips Santorum Tax Plan (Grade: D+)
Posted on 02/18/2012 11:26:25 PM PST by JediJones
An antitax advocacy group zinged Republican presidential candidate Rick Santorums tax plan, giving him a grade of D+ grade and the dubious honor of proposing what may be the worst idea of any of the Republican candidates.
The good news is Santorum has gotten more specific about his tax plan since last month when we gave him a D+, economist William McBride wrote on Thursday. The bad news is hes gotten more specific.
Mr. McBride said the biggest problem with Mr. Santorums proposal is the sharply different corporate tax rates he would establish. Mr. Santorum would halve the corporate tax rate to 17.5% from its current top rate of 35%. Manufacturers, however, would not have to pay any corporate taxes.
Mr. McBride said the idea is grossly unfair, and unlikely to gain traction in Washington. If it did, he said, many businesses would suddenly claim to be a manufacturer.
The tax group also took aim at Santorums suggestion to triple the tax deduction families can take for each child. This is obviously a big tax cut, and might spur growth, or it might just spur child making, Mr. McBride wrote. The Tax Foundation echoed concerns expressed earlier this week by the nonpartisan Tax Policy Center that tripling the child tax deduction could push more low-income families off the tax rolls.
While the Santorum campaign has filled in some of the details in recent weeks, big ones remain missing, Mr. McBride wrote. The plan would collapse the current six rates to just two 10% and 28% but it doesnt specify who would pay those rates, he said, adding: Thats kind of important.
(Excerpt) Read more at blogs.wsj.com ...
We have some experience with this, through the manufacturing deduction that went into effect in 2004, which engendered a national conversation on the subtle distinctions between burger flipping and manufacturing. Ultimately, nearly every industry took and continues to take the manufacturing deduction, based on IRS data.
...we could expect a much bigger effect of such a grossly differential corporate rate. It would likely result in everyone claiming to be a manufacturer.
He also plans to reduce taxes on capital gains and dividends from the current 15 percent to 12 percent. That seems almost inconsequential and certainly timid compared to most of the other candidates who are proposing to eliminate these taxes all together.
I am NOT surprised.
Unlike Newt Gingrich, Santorum has no real plan.
His was a vanity run for VP and he’s the very lucky recipient of Romney’s vicious lies of smears of Newt Gingich who was otherwise running away with this election on his postive campaign of radical, and solid ideas and solutions which are sorely and desperately needed if we’re going to have ANY HOPE at all of saving and restoring our Republic!
The tripling of the child deduction is LONG overdue. The idea that it might spur more children is great, we need then to grow up and work to pay into Social Security and make it a viable program. It would also allow for one of the parents to stay home and raise their children. It is long past time that the deduction gets close to the actual cost associated with child rearing. It is good for the family and subsequently the society.
Yes and yes.
There’s really no argument to be made for Rick that doesn’t include abject denial of the capability and competency Newt is offering.
That’s why you never hear from a Santorum supporter about Saint Rick’s excellent, visionary platform. It always starts off with “Newt is a SOB!”, or something along those lines.
The 0 percent for manufacturers is most likely Rick’s way of paying back his union buddies, who will just support the libs anyway. It’s also playing favorites. It’s funny that I heard him call this a “flat tax”, even though it’s 17 percent and 0 percent, two different tax rates. I don’t understand why he doesn’t call for eradicating the Capital Gains Tax. Makes no sense to me at all.
I prefer a fair tax myself. I actually really like Cain’s 999, and he promises to continue campaigning on it. After this nomination fight is over and we have Newt, I’m jumping back on the Cain train and will do all I can to promote it (which isn’t much). Nevertheless, Newt offers a flat tax at 15 percent, and corporate flat tax at 12.5 percent. No favoritism here. It’s a good step in the right direction towards a truly equitable tax system. Each person paying the SAME amount, no favorites, no picking winners and losers, no using government to discourage certain business or encourage others at the expense of still many more.
It’s my dream to one day see the progressive tax system we have now utterly destroyed and incapable of resurrection. Destroying it would do this country a lot of good.
I’d like to see more analysis on the child tax credit as an economic benefit. My suspicion is that it would spur more low-income households to have children, which would then need to be supported by the welfare state in countless other ways for decades to come. It would be dubious to me whether the financial losses on that welfare would pay off with increased social security revenue later on.
The problems with social security are much more fundamental than that. Like any Ponzi scheme, simply finding more new people to pay into the system is not a long-term or permanent solution.
Newt has the real solution to the social security system...private accounts that each individual would control. Like he said, it would require other funding to get us “over the hump” for current retirees as workers’ funds are diverted into personal accounts, but after that short-term pain we would be locked into a solvent system in the long-term. The Ponzi scheme has to stop and a sane system needs to be developed to replace it.
Having more children is a good thing for society, but there needs to be a broader message and effort made to that end. Motivating it solely through the welfare system and tax code doesn’t motivate 100% of the population anyway.
I also don’t believe keeping half the population “barefoot and pregnant” can sustain our economy. The world is too competitive now. In Europe we’re already seeing women performing better in the kind of jobs that are available in modern western countries. If laws have any role, they ought to promote more flex time, maternity leave or protection of a woman’s job during pregnancy. I don’t think children necessarily benefit from being coddled 24/7 throughout their young lives either. The idea that a woman would stay home and do nothing for her entire life but raise children seems like a real waste of potential, particularly once you get to the point where those children are in school throughout the day. To a certain degree, promoting this kind of society would result in my tax dollars ending up paying for someone to sit at home and watch soaps or play video games on Facebook most of the day. I think we all know how families handled their financial burdens decades ago, they didn’t live beyond their means. Funding people with welfare so that they never have to make tough choices about their budgets and lifestyle is not the way to go.
The child tax deduction does not need to be tripled — it needs to be abolished.
Remember, every tax deduction that favors one person is using government force to take those same tax dollars from somebody else. People should only have children if they can afford them on their own — not by forcing their childless neighbors to carry their tax burden.
This type of thinking is Rick’s problem — he thinks government social engineering is great ... as long as he’s the one doing the dictating of what is “good” and “bad” behavior.
Just make it simple like Newt’s ( ya stupid’s ), but Romney and Santorum are both LAWYERS!
No more damn lawyers!
The goal for our country is not to provide enough welfare, redistributive justice and transfer payments so that no one ever has to live in the lower class. There have been plenty of wonderful people who grew up in a poor family or the lower class and worked their way up.
Exactly. Rick’s tax plan is nothing but a list of vote-buying favors. He wants to make the tax code more complicated rather than less.
I like Newt’s plan better. It is better conceived, although I think it needs at least one tweak: If someone chooses to use deductions and credits to get a rate lower than 15%, what they owe should never fall below 10% of AGI. No more tax freeloading for anybody. I don’t care how many children YOU decided to have or how many electric cars YOU chose to buy or whether YOU get you income from labor or dividends or capital gains. Those were YOUR decisions and don’t deserve special treatment that only ends up forcing someone else to pay your tax burden instead of paying your own way.
What Rick is offering in many cases is the kind of stuff that destroys and corrupts our political system. He is offering tailored payouts to favored constituencies, in essence buying votes. He tries to couch this stuff in flowery terms about how things like "manufacturing" and "families" are what America's all about or will "make America great" again. But that's just spin. He's buying votes the same way that Obama bought votes. It's truly disheartening to see politics reduced to seeing which candidate in either party can use taxpayer money to bribe the right groups of people to win an election. We desperately need fair, equitable government policy like Newt is proposing which truly gives us all an equal chance to pursue happiness on a level playing field. Rick is the worst offender in the whole Republican field at playing the Democrat game of dividing the population up and trying to build vote-buying into the tax code.
Well, you’d have a bigger disagreement with Newt’s policy then because he is eliminating the capital gains tax entirely (not sure if that’s just the “long-term” cap gains tax or if the time distinction goes away). You have to believe that the cap gains tax has a direct relationship to spurring on investment and building the economy in order to believe that’s the right policy. I haven’t studied the issue in great depth to be able to argue the case one way or another. But for a long time our long-term cap gains tax has been intentionally lower than the income tax, that’s for sure.
there he goes again.............
Santorum is horrible and so are his plans.
I hope people come to their senses and drop Rick prior to Super Tuesday. Newt needs to make a big comeback. Newt must successfully paint both Rick (because of this lame tax favoritism) and Romney (because of Romneycare) as government busybodies and no different than any other nanny-stater.
I do disagree on the cap gains tax, but I consider it minor compared to the other issue of allowing deductions and credits to create swaths of tax freeloaders.
Taxes on capital gains and dividends is bad mostly because it amounts to double taxation — a tax on the corporate profits already reduces the value of the shares and therefor a tax on the shareholders profits amounts to double taxation.
Personally, I’d completely eliminate the corporate income tax and the employer-side payroll tax. I’d replace them with a 10% tax on payroll costs, including the embedded labor costs of imports ala Cain. Hence the corporate profits would not be taxed ... until they landed in a shareholder’s pocket as capital gains or dividends. So I would eliminate the double taxation, just as Newt does, but it would also eliminate all the overhead of tax compliance and lobbying which a simple corporate rate cut does not accomplish.
Santorum’s lack of vision and thoroughness are what have me in Newt’s camp.
His ideas and plans are old hash and proven failures. They have short term emotional appeal for the uninitiated and the uninformed. They sound good but that’s as far as they go; just good soundbites.
Still I want to see Romney defeated at all cost and let Newt and Santorum vie for the top spot. Gingrich-Santorum is not a bad combo but Newt has the vision, philosophy, experience and knowledge of history over Santorum.
There. Fixed it.
You are not gaining much ground, todays Washington Times, http://m.washingtontimes.com/news/2012/feb/17/questions-surface-gingrich-campaign-travel-payment/
My thoughts exactly. I gave up my career to stay home and raise my kids. What a slap in the face to women like me.
And you think that Rick Santorum is insulting to women?
Cutting corporate taxes in half is a good thing. Other than pandering, there is no justification for eliminating the capital gains tax.
In Europe were already seeing women performing better in the kind of jobs that are available in modern western countries.
Besides, government can do a better job raising children.
Good for you. Women (and the men that support them) deserve a lot of credit for investing in their children. Not everyone can do it, but those who can are doing a great thing. (IMO, of course)
I don't follow you here. "Flat tax" proposals come in a lot of flavors, and some are pretty loophole ridden. Some, in fact, are really not flat taxes at all, but rather somewhat bold tax simplification plans that try to claim the flat tax mantle for tactical reasons. That said, every "flat tax" proposal I have ever seen, including the self-advertised "pure" ones, has a zero bracket amount and then a flat tax on incomes above that level. How is this any different?
A flat tax or the fair tax are the ONLY options IMHO.
I agree, Santorum has to be taught conservative economic solutions because he is only to the right of Democrats. Go Newt!
For an “anti-tax” group they sure are complaining a lot about some wanting to CUT taxes. Nice progressive leftist use of the word “fair” thrown in there too.
I have 4 kids and we homeschool them. You have no idea what you are talking about.
Free your mind from the communist idea that human beings are nothing more than economic units. Life is not work.
I think we all know how families handled their financial burdens decades ago...
Decades ago we had a mostly intact nuclear family with a mother at home and a father provider. In every way, this country was better. It was growing and prospering, in contrast to the European model we follow now, which is decline, collectivism, and political correctness.
Flat Tax NO! Because it leaves the 16th in place and it can then grow back into the cancer we have today.
The only part I have a major problem with is the manufacturer part, because it screams favoritism, and, how does one define “manufacturer”?
I would also like to see that the tripled child exemption is only useable if married filing jointly.
Romney and saint Rick will get eaten alive by thugbama. For me I am down to rp and newt.
Well, people would scream, but one way to keep it from encouraging the wrong people to have kids is to only allow the larger deduction if you are MFJ and both taxpayers are the legal parents (via birth or adoption) of the child in question, and otherwise, the standard current deduction applies.
Steals other ideas and solutions, and views every solution around Mega-Huge Government, regulation and restriction.
Rob from Peter to Pay Paul, big government mentality. And some here claim that this rank stupidity will bring manufacturing back to the USA that has already left. (And loving it in their new homes.) But more importantly, this is tailored to help the big Unions, who Santorum is deeply involved with and goes out of his way to support.
But by more than doubling the tax burden on other forms of industrial ventures, they will also leave as fast as they can.
This is typical Big Government, Union Loving behavior, from a failed Senator who was voted out for good reason.
Well, the nazi socialists agreed with JediJones’ notion that women should be in the workforce and leave the care of their children to the state and “professional caregivers.” All collectivists, socialists, and statists think that way. I disagree. I consider myself extremely blessed to be able to stay home and raise my own children.
#17 Under Adolf Hitler, the state started taking over the job of child care.
The following is more eyewitness testimony from Kitty Werthmann....
When the mothers had to go out into the work force, the government immediately established child care centers. You could take your children ages 4 weeks to school age and leave them there around-the-clock, 7 days a week, under the total care of the government. The state raised a whole generation of children. There were no motherly women to take care of the children, just people highly trained in child psychology.
Of course this is exactly what is happening in America today. Children are raised by day care centers and public schools, and most parents spend very little time with their own children.
Santorums balanced-budget demand is of course suicide because the Leftists will use it as an excuse to raise taxes, the opposite of what needs to happen. There must be pressure to cut taxes and spending and that isnt done with a balanced budget amendment but with sound fiscal policy. A balanced budget amendment is a bad idea because it doesnt address our most critical political and economic problem: big government. It simply shifts the burden of the governments budget mismanagement problem onto the backs of the American people. Santorum’s offering of a balanced budget instead of less government is a terrible choice.
You have missed the point entirely!
The absolute reason why the cost of living has gone so out of control, is due entirely on the out of control expansion of Government.
In early America, the family system was very strong, because the Father could easily support a family of 6 to 8, on his job alone. But due to the rapid increase in the size of Government, disproportionate to the increase in Goods and Services, the cost of living has gone up to the point where it takes two income earners to support a family of just 3 or 4.
The unhealthy combination of regulation, higher taxes on business, restrictive government agencies, etc,, has accelerated the process to the breaking point. To go into business or manufacturing these days is nearly impossible, unless you have Millions backing you just to open the doors.
Count me on board as well. JediJones, your comment at #8 is insulting!
DO NOT pick winners and losers. Set a single - LOW - rate and let the creativity of the free market work its magic. Why is a “manufacturer” any better then a software publisher or service provider?
Which would no doubt include anchor babies. No thanks.
Anyone who uses such a term is a mindless cliche dispenser unworthy of the time or effort a serious conversation requires.
Sadly, we're up to our eyebrows with such people.
Rick Santorum is not a fiscal conservative. He is a social conservative and a national security conservative. Few these days are true fiscal conservatives. Ron Paul is but I can not vote for him because of his foreign policy. I choose to support Newt because he is the closest we got to a fiscal conservative. Now having said that I will vote for Rick Santorum if he wins the nomination. I will not vote or support either Mitt Romney or Ron Paul. My first choice is Newt.
If tax-PAYERS had more kids, that would be a good thing.
I knew it when he jeered and sneered at Cain’s 999 plan. He’s not interested in reforming anything ...just sticking to the status big gov quo.
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