JOBS & THE ECONOMY
Our tax code is too complex, our rates are too high, and the tax burden is carried by too few. It costs America’s taxpayers over $400 billion every year just to be in compliance with the 17,000-page tax code.
TIME TO COMPETE
An American Jobs Plan
Tax Reform
Governor Huntsman supports comprehensive reform to make America's tax code flatter, fairer, simpler and more conducive to growth.
Over the last 25 years, our tax system has devolved into a maze of credits, deductions, loopholes and temporary provisions, which create fiscal uncertainty and hinder America's competitiveness. American businesses suffer from the second-highest corporate tax rate in the developed world. High marginal rates also negatively impact small businesses, many of which file as individuals. These rates must be reduced for America to compete in the 21st Century economy.
Governor Huntsman's proposals are modeled after Ronald Reagan's 1986 tax reform package, which economist Dale Jorgenson calculated as yielding over one trillion dollars in efficiency gains.
A PROVEN RECORD
On tax reform, Governor Huntsman offers more than rhetoric; he also offers a record of results.
- In Utah, he signed the largest tax cut in state history, returning $400 million to families and businesses and earning him the "Taxpayer Advocate" award from the Utah Taxpayers Association.
- The Cato Institute called Huntsman's tax reform plan in Utah "very Reaganesque" and gave him an "A" in tax policy.
- Along with historic tax cuts, Huntsman also balanced every budget and tripled the state's rainy day fund, leading the Pew Center to name Utah the best-managed state in America.
- Huntsman's reforms helped Utah lead the nation in job creation under his leadership.
TAX REFORM PROPOSALS
Individual Taxes
Simplify the Personal Income Tax Code and Lower Rates
Gov. Huntsman supports a version of the plan crafted by the Fiscal Commission, headed by Erskine Bowles and Alan Simpson, commonly known as the "zero plan". Rather than nibble around the edges of the existing tax code, he will introduce a revenue-neutral 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, Governor Huntsman will eliminate the Alternative Minimum Tax, which is not indexed for inflation and is penalizing an increasing number of families and small businesses. This tax is especially burdensome on the majority of small business owners who file as individuals.
Corporate Taxes
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. Governor Huntsman will lower the corporate tax rate to the average of other OECD nations. 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.
Shift from a Worldwide System of Taxation to a Territorial System
We are one of the last countries taxing businesses on worldwide income and punishing businesses that bring money home. Shifting to a territorial system will allow American companies to compete with other global players and allow US-based multinationals to bring capital home to invest in new jobs.
Implement a Tax Holiday for Repatriation of Corporate Profits
A tax holiday for repatriation of corporate profits earned overseas will make available between $400 billion and $600 billion for companies to make capital investments. This is a critical tool in creating a pro-growth business environment that will get Americans back to work.
Capital Gains and Dividends
Eliminate the Taxes on Capital Gains and Dividends In Order to Eliminate the Double Taxation on Investment
Eliminating taxes on capital gains and dividends would lower the cost of capital and encourage investment in the American economy to create jobs. Additionally, these taxes amount to a double- taxation on most individuals who choose to invest since they first had to earn that money and pay income tax on it. Taxing these same dollars again when capital gains are realized serves to deter productive and much-needed investment in our economy.
