Giuliani Proposes 'Biggest US Tax Cut In History'

by Leroy Baker, Tax-News.com, New York

10 January 2008

Former New York Mayor and Republican presidential hopeful Rudy Giuliani has outlined his plans for a pro-growth tax cut package that he claims would result in the largest reduction in taxation in US history.

As he turned his attemtion to the Florida primary, scheduled for the end of the month, Giuliani announced on Wednesday that his multi-trillion dollar tax cut would easily exceed the level of the Reagan or Bush tax cuts, and is the most pro-growth among all of plans put foward by the current GOP presidential candidates. The proposals encompass cuts in the corporate income and capital taxes, and would create a simplified alternative minimum tax for both businesses and families.

Giuliani’s tax plan makes all the Bush tax cuts permanent, including full repeal of the death tax. It would also: index the alternative minimum tax (AMT) to inflation, and eventually repeal it; reduce the corporate income tax from today’s 35%, the second-highest in the developed world, to 25%; cut the capital gains and qualified dividends tax rate from 15% to 10% (and index capital assets to inflation), thus boosting 401(k) and IRA plans; replace the current patch work of tax-advantaged savings accounts with a simplified system of Retirement Savings Accounts and Lifetime Savings Accounts; and give all Americans the ability to purchase health insurance pre-tax through a health care standard deduction.

“This tax cut — the largest in history—would represent a monumental leap forward for the American taxpayer and the US economy,” commented Grover Norquist, President of the taxpayer pressure group Americans for Tax Reform, which campaigns for lower and simpler taxation. “In particular, cutting the corporate income tax and the capital gains tax is just what is needed to keep us from falling into recession," he added.

In addition, the Giuliani tax cut plan creates an alternate 'Fair And Simple Tax (FAST)' system that American families and small businesses could choose to go into each year, with a three-bracket structure, a 30% top rate, and only the most popular deductions in place.

“Most Americans, when given the choice to go into this simplified system, will flock toward it and never switch back,” continued Norquist. “Hong Kong has had an alternate tax system for years and the vast majority of residents use it happily.”

In addition to his tax cut proposal, Giuliani has committed to oppose and veto all tax increases, a pledge that he points out has also been adopted by every other Republican presidential candidate except John McCain and Fred Thompson, and by none of the Democrat presidential hopefuls.

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