THE SANTORUM SOLUTION
1.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;
2.Simplify the tax code and reduce middle income taxes by eliminating the Alternative Minimum Tax (AMT);
3.Simplify the tax code, encourage savings and investment, and reduces taxes by eliminating the Death Tax;
4.Lower the Capital Gains and Dividend tax rates to 12% to spur economic growth and investment;
5.Reduce taxes for families by tripling the personal deduction for each child;
6.Reduce and simplify taxes for families by eliminating marriage tax penalties throughout the federal tax code;
7.Retain deductions for charitable giving, home mortgage interest, healthcare, retirement savings, and children;
8.Eliminate the cap on deductions for losses incurred in the sale of a principal residence;
9.Cut the corporate income tax rate in half to make our businesses competitive around the world, from 35% to 17.5%;
10.Eliminate the corporate income tax for manufacturing activity to spur middle income job creation in the United States and benefit from the job multiplier effect in manufacturing;
11.Increase the Research & Development Tax Credit from 14% to 20% and make it permanent to spur on innovation in America;
12.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
Item by item which do you disagree with and why?
Can anyone play ?
1) We don’t need to penalize success by having a 28% tax rate when a single 15% rate for everyone generates the same tax revenue.
2) We don’t need to eliminate the AMT, we need to make it apply to everyone. While some people must pay 15% because deductions don’t reduce their income significantly, nobody’s deductions should reduce their income such that they pay less than 10% of AGI. Hence we need an AMT that applies to EVERYBODY, not just upper middle income and rich people.
3) Eliminating the death tax means people can leave money growing in investments, deferring taxes the whole time, and then passing it along to their children where it will never be taxed. I don’t see why those investment gains should not be “realized” at time of death, subtracting the costs of the investment to arrive at net gain, and taxing the estate’s income as capital gains before it is passed on to the heirs.
4) If the single rate for individual income taxes is 15%, I don’t see the point of a special 12% rate for capital gains and dividends. Let all income be treated equally.
5) Very bad idea. The exemption is currently $3,650 per dependent. Tripling it to $11,000 per dependent means a family with 4 kids would make the first $66K of income untaxable. The taxes they do not pay must be extracted from other people. Families should not expect to be able to push their tax burden onto the shoulders of their neighbors who chose not to have children.
6) A flat 15% tax already eliminates any marriage penalty.
7) Every favorable tax treatment for people who made these choices requires the government forcibly extract more taxes from people who did not make those choices. People should not be making these choices at the expense of their neighbors who earned the same income but spent it differently.
8) Principal residence, secondary residence, etc. should all be treated as investments and capital loss should be without limit just as any gain would be taxable without limit.
9) It doesn’t matter what you cut the corporate tax rate to, it won’t eliminate the overhead of compliance or the lobbying in DC. The only way to eliminate the corruption and wasted productivity is to eliminate the corporate income tax entirely. Taxing corporate income and then taxing individuals on their dividends and capital gains amounts to double taxation. Eliminate taxation at the corporate level and tax it as income to the individual shareholders.
10) Don’t play favorites. Eliminate the corporate income tax for all industries, not just manufacturing.
11) Tax credits are unnecessary when their is no corporate income tax.
12) No special treatment is necessary when there is no corporate income tax.