Gary Bauer on Tax Reform

	Gary Bauer on Tax Reform 2000 Republican Primary Candidate for President

No-tax pledge; but keep mortgage & charity deductions

FORBES [to Bauer]: Should we have a no-tax plank in the Republican platform?

BAUER: Of course we should have a no-tax pledge. The American people are over-taxed. But, Steve, I don’t like your tax plan. You take away the mortgage deduction, [which would] decrease housing values. You take away the charitable contribution deduction which churches rely on. And then you take the money you save from those two things and you give a new write-off to big business that will allow many of them to pay zero in federal taxes. My proposal is fair; It’s pro-family; it’s pro-entrepreneur; pro-mainstream. It looks out for the human capital of our country, which is most important.

FORBES: We need fundamental reform: getting rid of this current tax code. If you allow people to keep more of what they earn, housing will be helped. As for the business side, not allowing a small business to recover their investments, you’ll destroy them. And as a result you’ll destroy tens of millions of jobs.

Source: Republican Debate in Durham, NH , Jan 6, 2000

Estate tax is double taxation - remove it

Q: Why abolish the inheritance tax would when it would cost the treasury billions and would benefit only the very richest people who inherit money? A: The money was already taxed once. On what philosophy does the government get another chunk of it when you’re trying to give that money - the results of your hard work - to your children & grandchildren? Double taxation has never been an American principle and it shouldn’t be a principle in this area. So I would do away with the estate tax. Source: Phoenix Arizona GOP Debate , Dec 7, 1999

16% flat tax; keep mortgage & charity deductions

Q: Do you favor a flat tax? A: With a flat tax, what you describe as income becomes all-important. And how you see America’s wealth being created is all-important. My flat tax proposal recognizes that the real wealth of America is in our families. I have a 16% across-the-board rate. You would be able to keep your mortgage deduction and your charitable deduction. And everybody would pay the 16%, the waitress and the corporation. Source: Republican Debate at Dartmouth College , Oct 29, 1999

16% applies to corporations as well; with fewer deductions

[Under Bauer’s flat tax plan,] everybody would pay the 16%, the waitress & the corporation. [Forbes’ flat tax proposal] has a major new write-off for Big Business. He allows the big corporations to write off the entire cost of their investments in the year that they make them. That means that a lot of corporations will pay zero, while you are paying 25%, between the income tax and the payroll tax. I also have a 20% payroll-tax cut, so my plan is fairer for families, and it’s across the board. Source: Republican Debate at Dartmouth College , Oct 29, 1999

Return power from Wall St. to America’s families

Bauer said that his tax plan would make the Republicans the party “for the working American, blue collar and white collar, not just for the big corporate interests.” Mr. Bauer said, “I propose that we take power out of the hands of Washington, and return it, not to the huge corporations and Wall Street investment managers, but to America’s families, to the people who built this great country and who alone are responsible for its prosperity.” Source: New York Times, p. A19, col. 2 , Sep 24, 1999

20% cut in Soc.Sec. tax; raise business tax to compensate

Bauer [calls for] a 16% flat tax and a 20% cut in Social Security taxes. Bauer’s aides said his plan is designed to be beneficial to lower-income people. Bauer retains the Earned Income Tax Credit, which reimburses qualified lower-income people for certain income taxes. Aides portray the Bauer plan as “revenue neutral,” because it would increase certain investment taxes on businesses to make up for the cut in personal taxes. Source: Michael Kranish, Boston Globe, p. A10 , Sep 23, 1999

Taxes today are higher than in WWII, Middle Ages, or Bible

The total federal tax bit is bigger today than when our fathers and grandfathers marched off to defend freedom in World War II. In the Bible, God only asks for a tithe, one-tenth. And feudal lords were prohibited from confiscating more than a third of their serfs’ crops. Yet today the tax burden on the typical working family exceeds even what humble serfs were required to pay the robber barons of the Middle Ages. Source: Michael Kranish, Boston Globe, p. A10 , Sep 23, 1999

Deduct charity & mortgage; cut capital gains & estate taxes

Individuals and businesses would pay a 16% flat tax.
Most deductions would be eliminated, [except those for] charitable contributions and home mortgage interest.
The Social Security payroll tax would be cut by 20%
As a result, Social Security benefits would be cut by a roughly corresponding amount.
Capital gains would be taxed at 16%, down from the current 20%. The ‘death tax,’ or estate tax, would be abolished.

Source: Michael Kranish, Boston Globe, p. A10 , Sep 23, 1999

Flat tax: $1,400 personal exemption; no capital gains rate

Bauer he would tax capital gains at the same 16% rate as wages and profits. Bauer’s plan gives taxpayers a credit of $1,400 per person that could be used to offset both income and payroll taxes, unlike current credits that apply only to income taxes. This new credit would replace the current personal exemption, child care tax credit, and other tax credits. Businesses no longer could deduct the cost of investments in machinery and equipment, but would see their payroll taxes cut by 20%. Source: Jonathan D. Salant, Associated Press , Sep 23, 1999

Scrap tax system that favors capital over people

The present tax code is a broken system with confusing forms & instructions. Many live in fear of punishment for innocent mistakes. The tax code fails to recognize the value of investing in people. Instead, it favors investment in physical capital such as tools, factories, & buildings. The American people need a new tax system, one that is easier to understand, that is more fair, and recognizes that people are at least as important as tools and machines. [Replace the tax code with a] 16% flat tax. Source: Bauer2K.com “On the Issues: Flat Tax” , Sep 6, 1999

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