Ron Paul on Tax Reform Republican Representative (TX-14); previously Libertarian for President

AdWatch: Taxpayer’s best friend: never supported an increase

Narrator: Who among [the Republican candidates for president] has never supported a tax increase? Never supported an unbalanced budget? Never supported wasteful government spending?

Narrator: Congressman Ron Paul: The taxpayer’s best friend.

Narrator: We need to keep him fighting for our country. [Attributed on-screen to Ronald Reagan, pictured standing with Rep. Paul]

Spending money doesn’t stimulate economy; reduced taxes do

A: Well, a government program is too vague. What kind of a government program? If it’s appropriating money and trying to stimulate that way and spend more money, no, that would be the wrong thing to do. But a government program of a reduced tax burden, yes, that would be. I believe we’re in a recession. Over-stimulation in an economy by artificially low interest rates by the Federal Reserve is the source of the recession.

Doesn’t want flat tax or consumption tax

A: Well, I know. That’s why I don’t want it.

Q: So you have nothing?

A: I want to cut spending. I want to use the Constitution as our guide, and you wouldn’t need the income tax.

Get rid of IRS; get rid of income tax; get rid of spending

A: That’s a good idea. I like that idea.

Q: What would happen to all those lost revenues? How would we fund our government?

A: We have to cut spending. You can’t get rid of the income tax if you don’t get rid of some spending. But, you know, if you got rid of the income tax today you’d have about as much revenue as we had 10 years ago, and the size of government wasn’t all that bad 10 years ago. There’re sources of revenues other than the income tax. You have tariff, excise taxes, user fees, highway fees. So, so there’s still a lot of money. But the real problem is spending. But, you know, we lived a long time in this country without an income tax. Up until 1913 we didn’t have it.

Q: But if you eliminate the income tax, do you know how much lost revenue that would be?

A: A lot.

Q: Over a trillion dollars.

A: That’s good.

The most sinister of all taxes is the inflation tax

I have never voted for a tax increase; and never will

A: I have never voted for a tax increase; never will. But the tax issue is only one-half of it. You can easily pledge not to raise taxes, but you have to cut spending.

GovWatch: Zero income tax reverts to 1990 budget, not 2000

Paul told Leno that the abolition of the income tax would leave the federal government with roughly the revenues it was able to gather in 2000, before the overseas adventures of the Bush years.

This seemed too good to be true, and it was. Without the revenues from individual income tax, the federal budget would shrink to the size it was in the early 1990s, not the year 2000. The discretionary share of the federal budget would dwindle to zero. All remaining federal revenues would be earmarked for mandatory entitlement spending such as social security--which Paul has said he would not touch--and interest on debt.

The Paul campaign responds, “Policy wonks can go back and forth arguing over budget specifics. Dr. Paul’s point is that we can eliminate the income tax & fund a level of government from the recent past. Whether that year is 1995, 1997 or 2000 is irrelevant.”

Immediately work to phase out the IRS

Immediately. You can only do that if you change our ideas about what the role of government ought to be. If you think that government has to take care of us, from cradle to grave, & if you think our government should police the world and spend hundreds of billions of dollars on a foreign policy that we cannot manage, you can’t get rid of the IRS. But if you want to lower taxes and stop causing all the inflation, you have to change policy.

Get rid of the inflation tax with sound money

A: I would get rid of the inflation tax. It’s a tax that nobody talks about. We live way beyond our means. We print money for it. The value of the money goes down, and poor people pay higher prices. That is a tax. That’s a transfer of wealth from the poor and the middle class to Wall Street. Wall Street’s doing quite well, but the inflation tax is eating away at the middle class of this country. We need to get rid of the inflation tax with sound money.

Campaign slogan in 2004: The Taxpayers’ Best Friend

1986 tax simplification made tax code more incomprehensible

Madison would be apoplectic if he had been forced to witness the writing of the 2,000-page 1986 Tax “Simplification” Act, which no one fully understands. A decade will be required to decipher the thousands of pages of yet-to-be-written regulations. The chaos is not accidental: the taxing authorities can role any way they wish with those they choose to imprison as long as the tax code is incomprehensible. When our government officials call it “simplification,” we can be confident that it is exactly the opposite.

Inflation is a form of taxation on poor & middle class

Money of real value, gold or silver, was clearly intended by the Founding Fathers.

If for no other reason, inflation should be rejected on the basis of morality. Inflation is taxation by deceit. Government deceives the people as to the tax burden, and who is bearing it. The working and middle classes are gradually impoverished, while the poor are ground further down.

Wealth is transferred to the rich, from the hardworking and thrifty to the conniving & foxy. Monetary and economic decisions are increasingly taken from individuals and transferred to politicians, bureaucrats, and central bankers. To enforce the transfer, government officials accumulate power through legislation and regulation.

Voted NO on extending AMT exemptions to avoid hitting middle-income.

1. increase and extend through 2008 the alternative minimum tax (AMT) exemption amounts;
2. extend through 2008 the offset of personal tax credits against AMT tax liabilities; Reference: Alternative Minimum Tax Relief Act; Bill H.R.6275 ; vote number 2008-455 on Jun 25, 2008

   Voted YES on retaining reduced taxes on capital gains & dividends.

   Vote to reduce federal spending by $56.1 billion over five years by retaining a reduced tax rate on capital gains and dividends, as well as.
   • Decreasing the number of people that will be required to pay the Alternative Minimum Tax (AMT)
   • Allowing for deductions of state and local general sales taxes through 2007 instead of 2006
   • Lengthening tax credits for research expenses
   • Increasing the age limit for eligibility for food stamp recipients from 25 to 35 years
   • Continuing reduced tax rates of 15% and 5% on capital gains and dividends through 2010
   • Extending through 2007 the expense allowances for environmental remediation costs (the cost of cleanup of sites where petroleum products have been released or disposed)
   Reference: Tax Relief Extension Reconciliation Act; Bill HR 4297 ; vote number 2005-621 on Dec 8, 2005

   Voted YES on providing tax relief and simplification.

   Working Families Tax Relief Act of 2004
   • Extension of Family Tax Provisions
   • Repeals the scheduled reduction (15 to 10 percent) for taxable years beginning before January 1, 2005, of the refundability of the child tax credit.
   • Extends through 2005 the increased exemption from the alternative minimum tax for individual taxpayers.
   • Extends through 2005 the following expiring tax provisions:
     1. the tax credit for increasing research activities;
     2. the work opportunity tax credit;
     3. the welfare-to-work tax credit;
     4. the authority for issuance of qualified zone academy bonds;
     5. the charitable deduction for donations by corporations of computer technology and equipment used for educational purposes;
     6. the tax deduction for certain expenses of elementary and secondary school teachers;
     7. the expensing of environmental remediation costs;
     8. the designation of a District of Columbia enterprise zone
   Reference: Bill sponsored by Bill Rep Thomas [R, CA-22]; Bill H.R.1308 ; vote number 2004-472 on Sep 23, 2004

   Voted YES on making permanent an increase in the child tax credit.

   Vote to pass a bill that would permanently extend the $1,000 per child tax credit that is scheduled to revert to $700 per child in 2005. It would raise the amount of income a taxpayer may earn before the credit begins to phase out from $75,000 to $125,000 for single individuals and from $110,000 to $250,000 for married couples. It also would permit military personnel to include combat pay in their gross earnings in order to calculate eligibility for the child tax credit. Reference: Child Credit Preservation and Expansion Act; Bill HR 4359 ; vote number 2004-209 on May 20, 2004

   Voted YES on permanently eliminating the marriage penalty.

   Vote to pass a bill that would permanently extend tax provisions eliminating the so-called marriage penalty. The bill would make the standard deduction for married couples double that of single taxpayers. It would also increase the upper limit of the 15 percent tax bracket for married couples to twice that of singles. It also would make permanent higher income limits for married couples eligible to receive the refundable earned-income tax credit. Reference: Marriage Penalty Relief; Bill HR 4181 ; vote number 2004-138 on Apr 28, 2004

   Voted YES on making the Bush tax cuts permanent.

   Vote to pass a bill that would permanently extend the cuts in last year's $1.35 trillion tax reduction package, many of which are set to expire in 2010. It would extend relief of the marriage penalty, reductions in income tax rates, doubling of the child tax credit, elimination of the estate tax, and the expansion of pension and education provisions. The bill also would revise a variety of Internal Revenue Service tax provisions, including interest, and penalty collection provisions. The penalties would change for the failure to pay estimated taxes; waive minor, first-time error penalties; exclude interest on unintentional overpayments from taxable income; and allow the IRS greater discretion in the disciplining of employees who have violated policies. Reference: Bill sponsored by Lewis, R-KY; Bill HR 586 ; vote number 2002-103 on Apr 18, 2002

   Voted YES on $99 B economic stimulus: capital gains & income tax cuts.

   Vote to pass a bill that would grant $99.5 billion in federal tax cuts in fiscal 2002, for businesses and individuals.

   The bill would allow more individuals to receive immediate $300 refunds, and lower the capital gains tax rate from 20% to 18%.

   Bill HR 3090 ; vote number 2001-404 on Oct 24, 2001

   Voted YES on Tax cut package of $958 B over 10 years.

   Vote to pass a bill that would cut all income tax rates and make other tax cuts of $958.2 billion over 10 years. The bill would convert the five existing tax rate brackets, which range from 15 to 39.6 percent, to a system of four brackets with rates of 10 to 33 percent. Reference: Bill sponsored by Thomas, R-CA; Bill HR 1836 ; vote number 2001-118 on May 16, 2001

   Voted YES on eliminating the Estate Tax ("death tax").

   Vote to pass a bill that would gradually reduce revenue by $185.5 billion over 10 years with a repeal of the estate tax by 2011. Reference: Bill sponsored by Dunn, R-WA; Bill HR 8 ; vote number 2001-84 on Apr 4, 2001

   Voted YES on eliminating the "marriage penalty".

   Vote on a bill that would reduce taxes for married couple by approximately $195 billion over 10 years by removing provisions that make taxes for married couples higher than those for two single people. The bill is identical to HR 6 that was passed by the House in February, 2000. Reference: Bill sponsored by Archer, R-TX; Bill HR 4810 ; vote number 2000-392 on Jul 12, 2000

   Voted YES on $46 billion in tax cuts for small business.

   Provide an estimated $46 billion in tax cuts over five years. Raise the minimum wage by $1 an hour over two years. Reduce estate and gift taxes, grant a full deduction on health insurance for self-employed individuals, increase the deductible percentage of business meal expenses to 60 percent in 2002, and designate 15 renewal communities in urban rural areas. Reference: Bill sponsored by Lazio, R-NY; Bill HR 3081 ; vote number 2000-41 on Mar 9, 2000

   Overhaul income tax; end capital gains & inheritance tax.

   Paul adopted the Republican Liberty Caucus Position Statement:
   As adopted by the General Membership of the Republican Liberty Caucus at its Biannual Meeting held December 8, 2000.
   • WHEREAS libertarian Republicans believe in limited government, individual freedom and personal responsibility;
   • WHEREAS we believe that government has no money nor power not derived from the consent of the people;
   • WHEREAS we believe that people have the right to keep the fruits of their labor; and
   • WHEREAS we believe in upholding the US Constitution as the supreme law of the land;
   BE IT RESOLVED that the Republican Liberty Caucus endorses the following [among its] principles:
   1. The tax system of the United States should be overhauled.
   2. There should be a national debate discussing various alternative means of taxation including but not limited to a single flat income tax, repealing the income tax and replacing it with a national sales tax, and reducing spending to the point where the income tax can be repealed without the need to replace it with a national sales tax or any other form of taxation.
   3. The capital gains tax should be *eliminated*.
   4. The inheritance tax should be *eliminated*.
   5. The new tax system should be implemented *promptly*.
   Source: Republican Liberty Caucus Position Statement 00-RLC4 on Dec 8, 2000

   Phaseout the death tax.

   Paul co-sponsored the Death Tax Elimination Act:

   Title: To amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period.

   Summary: Repeals, effective January 1, 2011, current provisions relating to the basis of property acquired from a decedent. Provides with respect to property acquired from a decedent dying on January 1, 2011, or later that:
   1. property shall be treated as transferred by gift; and

   2. the basis of the person acquiring the property shall be the lesser of the adjusted basis of the decedent or the fair market value of the property at the date of the decedent's death.

   3. Requires specified information to be reported concerning non-cash assets over $1.3 million transferred at death and certain gifts exceeding $25,000.

   4. Makes the exclusion of gain on the sale of a principal residence available to heirs.

   5. Revises current provisions concerning the transfer of farm real to provide that gain on such exchange shall be recognized to the estate only to the extent that the fair market value of such property exceeds such value on the date of death.

   6. Provides a similar rule for certain trusts.

   7. Amends the special rules for allocation of the generation-skipping tax (GST) exemption to provide that if any individual makes an indirect skip during such individual's lifetime, any unused portion of such individual's GST exemption shall be allocated to the property transferred to the extent necessary to make the inclusion ratio for such property zero; and

   8. if the amount of the indirect skip exceeds such unused portion, the entire unused portion shall be allocated to the property transferred.

   9. Provides that, if an allocation of the GST exemption to any transfers of property is deemed to have been made at the close of an estate tax inclusion period, the value of the property shall be its value at such time.
   Source: House Resolution Sponsorship 01-HR8 on Mar 14, 2001

   Rated 89% by NTU, indicating a "Taxpayer's Friend" on tax votes.

   Paul scores 89% by NTU on tax-lowering policies

   Every year National Taxpayers Union (NTU) rates U.S. Representatives and Senators on their actual votes—every vote that significantly affects taxes, spending, debt, and regulatory burdens on consumers and taxpayers. NTU assigned weights to the votes, reflecting the importance of each vote’s effect. NTU has no partisan axe to grind. All Members of Congress are treated the same regardless of political affiliation. Our only constituency is the overburdened American taxpayer. Grades are given impartially, based on the Taxpayer Score. The Taxpayer Score measures the strength of support for reducing spending and regulation and opposing higher taxes. In general, a higher score is better because it means a Member of Congress voted to lessen or limit the burden on taxpayers. The Taxpayer Score can range between zero and 100. We do not expect anyone to score a 100, nor has any legislator ever scored a perfect 100 in the multi-year history of the comprehensive NTU scoring system. A high score does not mean that the Member of Congress was opposed to all spending or all programs. High-scoring Members have indicated that they would vote for many programs if the amount of spending were lower. A Member who wants to increase spending on some programs can achieve a high score if he or she votes for offsetting cuts in other programs. A zero score would indicate that the Member of Congress approved every spending proposal and opposed every pro-taxpayer reform.

   Source: NTU website 03n-NTU on Dec 31, 2003

   Rated 0% by the CTJ, indicating opposition to progressive taxation.

   Paul scores 0% by the CTJ on taxationissues

   OnTheIssues.org interprets the 2005-2006 CTJ scores as follows:

   • 0% - 20%: opposes progressive taxation (approx. 235 members)
   • 21% - 79%: mixed record on progressive taxation (approx. 39 members)
   • 80%-100%: favors progressive taxation (approx. 190 members)
   About CTJ (from their website, www.ctj.org):

   Citizens for Tax Justice, founded in 1979, is not-for-profit public interest research and advocacy organization focusing on federal, state and local tax policies and their impact upon our nation. CTJ's mission is to give ordinary people a greater voice in the development of tax laws. Against the armies of special interest lobbyists for corporations and the wealthy, CTJ fights for:

   • Fair taxes for middle and low-income families
   • Requiring the wealthy to pay their fair share
   • Closing corporate tax loopholes
   • Adequately funding important government services
   • Reducing the federal debt
   • Taxation that minimizes distortion of economic markets
   Source: CTJ website 06n-CTJ on Dec 31, 2006

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