Rick Santorum on Tax Reform Republican Jr Senator (PA); 2012 presidential frontrunner

My 10% flat tax brings 3.5M jobs back to America

20% flat tax on all income of all types

SANTORUM: I have a 20 percent flat tax. That's on all income--so capital gains, corporations, individuals, 20 percent. I think that's a fair number. I don't allow for deductibility of state and local taxes, which will require state and local taxes to go down. So the answer is, 20 percent and probably 33 percent overall.

Gov. JINDAL: Under our tax plan, the top rate is 25%, [then for the middle class] 10%, [then everyone else pays] 2%.

Gov. CHRISTIE: Our plan puts forward a rate of 28% for those who are making the most and 8% on the low end. We get rid of all deductions except for the home mortgage interest deduction and the charitable contribution deduction. That means getting rid of the state and local income tax deduction.

My tax plan reduces taxes for every income bracket

20/20 tax plan: all income treated the same

SANTORUM: Actually, I'm going to be proposing a plan, I call it the 20/20 perfect vision for America as flat tax, a 20% flat tax on income, 20% flat tax on capital gains and on corporations. We eliminate all the deductions and special interest provisions. We deal with the carried interest issue, because everybody pays the same 20%. So, there's no advantage as to how you take your income. That will create growth. We put a 20% rate on corporations; then we're competitive with almost every country in the world. We allow for expensing; we have a three year phase in. We start at zero for manufacturers, phase it up to 20. So, the answer is, we're going to lower, and flatten taxes. We're going to put government on a budget: a 10% across the board cut.

Just two income tax rates: 10% and 28%

PERRY: Seven percent flat tax. Simple. Keep it simple.

SANTORUM: Well, my plan has two rates, 10 and 28 percent, which is the highest rate under Ronald Reagan when he cut taxes.

ROMNEY: I would like 25 percent, but right now it's at 35, so people better pay what is legally required. But ultimately let's get it down to as low as we possibly can, if it's 20, if it's 25 but paying more than 25 percent, I think, is taking too much out of our pockets.

GINGRICH: I would like to see it be a flat tax at 15 percent and I would like to see us reduce government to meet the revenue, not raise revenue to meet the government.

PAUL: Well, we should have the lowest tax that we've ever had, and up until 1913 it was 0%. What's so bad about that?

Simplify tax code: just 5 deductions; everything else goes

Q: [to Santorum]: How would you raise the kind of revenues called for in the Simpson-Bowles Commission?

SANTORUM: Our plan puts together a package that focuses on simplifying the tax code and I agree with Gov. Huntsman on that. Five deductions: Health care, housing, pensions, children and charities. Everything else goes. We focus on the pillars that have broad consensus of this country in the important sectors of our economy, including our children. The other side is the corporate side. Cut it in half, to 17.5%. But I do something different than anybody else. I'm very worried about a sector of our economy that has been under fire. I come from southwestern Pennsylvania, the heart of the steel country, the heart of manufacturing. And it's been devastated because we are uncompetitive.

84% of Americans pay more tax if we have national sales tax

SANTORUM: 84% of Americans would pay more taxes under his plan. That's the analysis. And it makes sense, because when you don't provide a standard deduction, when you don't provide anythin for low-income individuals, and you have a sales tax and an income tax and 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 A single person pays as much in taxes 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 have children and not have to pay more already to raise children, but also gave some breaks for families. He doesn't do that in this bill. We've seen that in Europe. Boom, birth rates went into the basement. I give Cain credit for starting a debate, but it's not good for families.

Changing estate tax would cost $100B, not save $730B

CASEY: When it comes to the budget, what’s missing principally is a lack of fiscal responsibility. [We should] repeal the tax cut for people making over $200,000 a year. That change, in addition to an estate tax change, could get you about $730 billion over 10 years.

Q: How does that balance the current budget?

CASEY: You can’t balance a budget in one year. They’ve put us in such a fiscal hole, it will take many years.

Q: Well, give me a couple ideas.

SANTORUM: Changing the estate tax cut would cost money over the long term, not save money. The death tax snaps back to the old death tax in 2011, and it would cost $100 million just to do the changes that he suggested. I’m for not taking more people’s money when they die.

More child credit for larger families earning over $110,000

That was not always the case. In 1950, before government exploded, the average tax burden on the American family was 2% of its income. Today the burden is 25%, over half of which is Social Security and Medicare taxes. And the burden is often heavier for larger families, because of the phasing out of the child credit for families with a total income of $110,000. Now, before you start complaining about tax breaks for the rich, answer me this: Is a family making $110,000 with one child as well off economically as a family with 8 children at that same salary? Obviously not, but the tax code phases out the child credit all the same.

Death should not be a taxable event

Tax burden increases inequities & decreases savings

Tax credits are for families who pay taxes

Voted YES on supporting permanence of estate tax cuts.

Proponents recommend voting YES because:

The permanent solution to the death tax challenge that we have today is a compromise. It is a compromise that prevents the death rate from escalating to 55% and the exclusion dropping to $1 million in 2011. It also includes a minimum wage increase, 40% over the next 3 years. Voting YES is a vote for that permanent death tax relief. Voting YES is for that extension of tax relief. Voting YES is for that 40% minimum wage increase. This gives us the opportunity to address an issue that will affect the typical American family, farmers, & small business owners.

Opponents recommend voting NO because:

Family businesses and family farms should not be broken up to pay taxes. With the booming economy of the 1990s, many more Americans joined the ranks of those who could face estate taxes. Raising the exemption level and lowering the rate in past legislation made sense. Under current law, in my State of Delaware, fewer than 50 families will face any estate tax in 2009. I oppose this legislation's complete repeal of the estate tax because it will cost us $750 billion. Given the world we live in today, with clear domestic needs unmet, full repeal is a luxury that we cannot afford.

To add insult to this injury, the first pay raise for minimum wage workers in 10 years is now hostage to this estate tax cut. We are told that to get those folks on minimum wage a raise, we have to go into debt, so that the sons and daughters of the 7,000 most fortunate families among us will be spared the estate tax. We must say no to this transparent gimmick.

Voted YES on permanently repealing the `death tax`.

Proponents of the motion say:
• We already pay enough taxes over our lifetimes We are taxed from that first cup of coffee in the morning to the time we flip off the lights at bedtime. If you are an enterprising entrepreneur who has worked hard to grow a family business or to keep and maintain that family farm, your spouse and children can expect to hear the knock of the tax man right after the Grim Reaper.
• In the past, when Congress enacted a death tax, it was at an extraordinary time of war, and the purpose was to raise temporary funds. But after the war was over the death tax was repealed. But that changed in the last century. The death tax was imposed and has never been lifted.
• The death tax tells people it is better to consume today than to invest for the future. That doesn't make sense.

Opponents of the motion say:
• Small businesses and farms rarely--if ever--are forced to sell off assets or close up shop to pay the tax. Under the current exemption, roughly 99% of estates owe nothing in estate taxes. By 2011, with a $3.5 million exemption, only two of every 100,000 people who die that year would be subject to the estate tax.
• Today's vote is on a motion to proceed to a bill to repeal the estate tax. Not to proceed to a compromise or any other deal--but to full repeal. I oppose full repeal of the estate tax. Our Nation can no longer afford this tax break for the very well off. Permanently repealing the estate tax would add about $1 trillion to our national debt from 2011 to 2021.

Voted NO on $47B for military by repealing capital gains tax cut.

• $25.4 billion for procurement
• $17 billion for Army operation and maintenance
• $4.5 billion for Marine Corps operation and maintenance

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

• 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)

Voted YES on extending the tax cuts on capital gains and dividends.

1. Extension Of Expiring Provisions: for business expenses, retirement savings contributions, higher education expenses, new markets tax credit, and deducting state and local sales taxes.
2. Provisions Relating To Charitable Donations, and Reforming Charitable Organizations
3. Improved Accountability of Donor Advised Funds
4. Improvements in Efficiency and Safeguards in IRS Collection

Opponents of the bill recommend voting NAY because:
• Health care for children (among many other things) should come before tax cuts for the wealthy.
• The 2-year cost of the extensions on capital gains tax cuts for the wealthiest Americans is $20 billion. So if we defer the tax break the administration is pushing for the wealthiest people in America, we would have enough money to provide basic health insurance for every uninsured child in America, and we would eliminate 20% of the uninsured Americans with that single act alone.

Proponents of the bill recommend voting YEA because:
• The largest provision in the bill--about $30 billion of tax relief--amounts to half of the net tax package and is designed to keep 14 million people out of the Alternative Minimum Tax. The AMT is terrible and should be repealed.
• College tuition benefits for families who send their kids to college -- by definition, this benefit goes to middle-income families.
• The small savers' credit -- for low-income folks that save through an IRA or pension plan.
• Many small businesses use the small business expensing benefit to buy equipment on an efficient after-tax basis. It is good for small business. It is good for economic growth.

Voted YES on $350 billion in tax breaks over 11 years.

Voted NO on reducing marriage penalty instead of cutting top tax rates.

Voted NO on increasing tax deductions for college tuition.

Voted YES on eliminating the 'marriage penalty'.

Voted YES on across-the-board spending cut.

Voted YES on requiring super-majority for raising taxes.

Rated 81% by NTU, indicating a "Taxpayer's Friend" on tax votes.

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.