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Hopeless candidate, sensible proposal

September 01, 2011

Jon Huntsman is chasing the Republican Presidential nomination by pursuing Republican voters who think they are just too darn smart for Sarah Palin. This has developed him a loyal following of about two people.

Now he's made a bold move to expand his base to the much larger, if still insignificant, population of tax nerds. He has actually made a sensible tax proposal, as the Tax Prof reports:

Republican presidential candidate Jon Huntsman today released a 12-page jobs plan with these tax components:

Simplify The Personal Income Tax Code And Lower Rates. Rather than nibble around the edges of the existing tax code, Gov. Huntsman will introduce a revenue-neutral tax 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, Gov. Huntsman will eliminate the Alternative Minimum Tax, which is not indexed for inflation and is penalizing an increasing number of families and small businesses.

Eliminate The Taxes On Capital Gains And Dividends In Order To Eliminate The Double Taxation On Investment. Capital gains and dividend taxes amount to a double-taxation on individuals who choose to invest. Because dollars invested had to first be earned, they have already been subject to the income tax. Taxing these same dollars again when capital gains are realized serves to deter productive and much-needed investment in our economy.

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. 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.

It akes a lot of sense; you can tell because Linda Beale hates it. More from Going Concern and Instapundit.

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Come on, Peter. Surely even you must acknowledge that Huntsman's proposed zero capital gains taxation argument is botched. He obviously doesn't even understand basis, since he says that because you invest money that has been taxed, it is a 'double tax' if you are taxed on GAINS from investments.

And do you really agree with Huntsman that it is fair to put all the burden of tax on the working stiff while letting those who live off of capital income off scott free? Especially with the idea that even the poorest of the poor should pay 8% of their meager income in taxes, apparently with no standard deduction, no earned income tax credit, no child tax credit?

I'd have thought that even a thorough-going supporter of tax cuts like you would acknowledge when arguments are screwy or that cuts that shift the entire burden to the middle class and poor while letting the wealthy off scott free just don't make sense.

Stop calling me Shirley! I mean, Peter...

Of course there is a double tax on capital gain, to the extent stock price reflects undistributed but taxed earnings.

While I like tax cuts, taxes should be high enough to pay for the government we insist on. I would insist on a lot less. But whatever tax system you have, it should be at low and relatively flat rates, with few deductions and credits. That means people can comply relatively easy and have less ability or incentive to game the system.

If the federal income tax will be the principal way to fund government operations, it should have a relatively broad base. Now the federal income tax is overwhelmingly a high-earner tax. That's a recipe for disaster and unrestrained spending, until the "rich" run out of money.

Yes, I know that the poor pay payroll taxes, but that doesn't even cover the current operating costs of social security anymore.

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