Fox News Sunday, "Choosing the President" interviews: on Tax Reform

Fred Thompson: Two options: file as you do now, or flatter two-rate plan

A: Yep. It’s maintaining the tax cuts that we had in 2001 & 2003. It’s eliminating the death penalty. It’s reducing the corporate tax rate. We have the second-highest corporate tax rate among our competing partners. It’s hurting us competitively. We’re probably losing revenue from it. We have several other provisions in it, but another major one is an adoption, basically, of the approach that the House Republican study group has that would give taxpayers an option of continuing to file the way they do now or filing under a flatter plan where you only have two rates, but no exemptions past the personal exemption and no deductions. So give that a try. And it would be a major move toward tax reform, which I think is greatly needed.

Fred Thompson: Index the AMT for now; repeal it eventually

A: Eventually.

Q: Because there’s no indexing, there’s concern that middle class families who weren’t supposed to fall under the AMT are now being hit, but you’re going to repeal it for rich people as well. Why repeal it for everyone?

A: Well, it was a tax that never was supposed to be imposed on anybody except about 155 taxpayers, and now we’re seeing about 23 million taxpayers. At the current rate, the AMT will be collecting more tax revenue than the regular tax system. So what we’re saying is that let’s index it from year to year until we get a handle on spending, and then we’ll eliminate it. [Otherwise] taxes are going to be high without anybody having to do anything-- the automatic AMT increase would include millions of people who were not originally intended to be covered, income tax rates going up substantially for just about everybody in America. And that’s bad for the economy.

Mike Huckabee: FairTax is 23%; Bush’s study missed prebate & other aspects

A: Right.

Q: This would be a sales tax of 23% on almost every good and service you buy or anyone buys. But a bipartisan panel named by President Bush say to raise enough money, the rate would have to be 34%.

A: They didn’t really study the FairTax. They simply studied a type of consumption tax, not the actual proposal that was designed by some of the leading economists in this country. It is a rate of 23%. It’s not 30% or 34%, as some of the critics complain.

Q: They said that a FairTax would reduce the tax burden on only two groups, those making less than $30,000 a year, because there’s a rebate for people under the poverty line, and those making more than $200,000 a year. So the rich and the poor do better, but the vast middle class ends up paying more taxes.

A: They had a fatal flaw. They didn’t understand that the “prebate” applies to everybody, including the middle class. Everybody comes off better off.

Mike Huckabee: Gut this incredibly complex and arcane tax code

Mike Huckabee: Attacked as tax-and-spend by several anti-tax groups

A: I have to be a little flattered that the Club for Growth targeted me with $100,000 of ads. But there are nuances of a state government--I’m quite proud of having navigated a ship through trouble waters in Arkansas.

Q: It’s not just the Club for Growth. The Cato Institute gave you a “D” on taxes for your 10 years as governor. Americans for Tax Reform said that state spending during your first 8 years as governor increased by 65%.

A: But if you look at our state spending, budgeting during my time as governor increased about 0.5% a year. When you look at the things that I actually had control [over, you would ignore] these wild accusations that I’m a tax and spender.

John McCain: Bush tax cuts fiscally reckless & favored rich;but keep them

A: No, because it would have the effect of a tax increase, and I don’t support tax increases. The fact is that in 2000 I had a proposal that restrained spending. I voted against those tax cuts because there was no restraint of spending, and spending lurched out of control completely.

Q: President McCain, no new taxes?

A: Of course not. I’ve never supported tax increases. I don’t support them now.

Q: And that’s a pledge that you would make over your four years?

A: I don’t take pledges. The fact is my record is very clear of opposition to tax increases. I oppose tax increases. I don’t take pledges.