Calling for Major Tax Reform, Tim Pawlenty Focuses on Economic Growth
Around the State
With his eyes now on the Republican presidential nomination in 2012, former Gov. Tim Pawlenty of Minnesota hit Barack Obama’s old stomping grounds Tuesday to challenge the president on the economy and government spending, and call for a restructuring of the tax system.
Pawlenty spoke at the University of Chicago on Tuesday, where Obama taught law from 1992 until 2004 when he was elected to the U.S. Senate. The former Minnesota governor called for a “better deal” to revive the American economy.
With the national unemployment moving up to 9.1 percent and a new poll from the Washington Post and ABC News released on Tuesday showing that a majority of Americans had no faith in Obama’s abilities to lead the country back to prosperity and remained convinced that the economy was not recovering, Pawlenty laid out his plan for new economic growth.
“The United States is still home to the most dynamic and entrepreneurial people in the world. They’re all around us, ready to innovate, invest, compete, and create new businesses and jobs. That will mean opportunities for everyone,” said Pawlenty. “They have been discouraged and weighed down by President Obama’s big government and heavy-handed regulations.”
Pawlenty blew off the current models of economic growth as inadequate and called for a new vision.
“Let’s start with a big, positive goal. Let’s grow the economy by 5 percent, instead of the anemic 2 percent envisioned currently,” said Pawlenty. “Such a national economic growth target will set our sights on a positive future and inspire the actions needed to reach it. By the way, 5 percent growth is not some pie-in-the-sky number. We’ve done it before, and with the right policies we can do it again.”
The former governor insisted that lower business taxes would help propel that type of economic expansion.
“American businesses today pay the second highest tax rates in the world. That’s a recipe for failure, not adding jobs and economic growth,” said Pawlenty. "We should cut the business tax rate by more than half. I propose reducing the current rate from 35 percent to 15 percent. But our policies can’t just be about simply cutting rates. They must also promote freedom and free markets. The tax code is littered with special-interest handouts, carve-outs, subsidies, and loopholes that should be eliminated.”
Pawlenty called for a dramatic restructuring of the tax system for small businesses and individuals.
“Small-business owners and hard-working Americans need a better deal, too. Small businesses should also have the option of paying at the corporate rate,” said Pawlenty. “On the individual rates we need a simpler, fairer, flatter tax system overall. I propose just two rates: 10 percent and 25 percent. Under my plan, those who currently pay no income tax would stay at a zero rate. After that, the first $50,000 of income – or $100,000 for married couples – would be taxed at 10 percent. Everything above that would be taxed at 25 percent. That’s it. A one-third cut in the bottom rate to allow younger, middle- and lower-income families to save and build wealth. And a 28 percent cut in the top rate to spur investment and job creation.”
Pawlenty also called for the elimination of the capital gains tax and the death tax.
Pointing to his record in Minnesota, Pawlenty pledged to fight to reduce the size and scope of the federal government -- and pointed to a popular search engine as an inspiration.
“There are some obvious targets,” said Pawlenty. “We can start by applying what I call ‘The Google Test.’ If you can find a good or service on the Internet, then the federal government probably doesn’t need to be doing it. The post office, the government printing office, Amtrak, Fannie and Freddie, were all built for a time in our country when the private sector did not adequately provide those products. That’s no longer the case.”
Pawlenty pushed for a freeze of federal spending and called for a balanced budget.
“I propose that Congress grant the president the temporary and emergency authority to freeze spending at current levels, and impound up to 5 percent of federal spending until such time as the budget is balanced,” said Pawlenty. “If they won’t do it … I will. As an example, cutting even 1 percent of overall federal spending for six consecutive years would balance the federal budget by 2017."
The former Minnesota governor slammed Obama for increasing regulations on businesses and individuals.
“Federal regulations will cost our economy $1.75 trillion this year alone; it’s a hidden tax on every American consumer, built into the price of every good and service in the economy,” said Pawlenty. “And make no mistake: The current administration is hunting far bigger game than the incandescent light bulb.”
He also hammered the federal health-care law backed by the Obama administration and ended with a fierce indictment of his presidency.
“President Obama is a champion practitioner of class warfare,” said Pawlenty. “Elected with a call for unity and hope, he has spent three years dividing our nation, fanning the flames of class envy and resentment to deflect attention from his own failures and the economic hardship they have visited on America."
Pawlenty also took to the pages of the Chicago Tribune where he also touched on his economic proposals and took aim at the Obama administration.
Pawlenty is not the only Republican candidate who has been attacking Obama on the economy. In the speech that he made Monday when he entered the race, former U.S. Sen. Rick Santorum of Pennsylvania slammed the president on fiscal issues. Supporters of former Gov. Mitt Romney of Massachusetts and businessman Herman Cain have pointed to their candidates’ record in the private sector as part of the credentials to fix the economy.
Other declared and possible candidates for the Republican nomination include U.S. Rep. Michele Bachmann of Minnesota, former U.N. Ambassador John Bolton, former U.S. House Speaker Newt Gingrich of Georgia, former Utah Gov. Jon Huntsman, former Gov. Gary Johnson of New Mexico, activist Fred Karger, U.S. Rep. Peter King of New York, U.S. Rep. Thad McCotter of Michigan, former state Chief Justice Roy Moore of Alabama, former Alaska Gov. Sarah Palin, former Gov. George Pataki of New York, U.S. Rep. Ron Paul of Texas, Gov. Rick Perry of Texas and former Gov. Buddy Roemer of Louisiana.
Reach Kevin Derby at email@example.com or at (850) 727-0859.