Pawlenty Gets It

Pawlenty’s Plan

Tim Pawlenty has outlined his economic goals:

1)      5% economic growth

2)      Medicaid reform – cap and block grant

3)      Raise the Social Security retirement age

4)      15% Corporate Tax rate

5)      Lower personal taxes

6)      Freeze Federal spending until budget is balanced

Pawlenty understands that the government shouldn’t prosper, but if it does, it should be only as the nation prospers.

            “American businesses today pay the second highest tax rates in the world. That’s a recipe for failure, not adding jobs and economic growth.

            “We should cut the business tax rate by more than half. I propose reducing the current rate from 35% to 15%. 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.”

Lowering the Corporate tax rate is essential to economic growth.  Doing so makes the USA a more attractive place to do business.  That helps attract corporations and it keeps businesses here.  It allows corporations to reinvest in themselves at a higher rate which translates to a greater ability to compete and to grow and hire more workers.  More people working is the best economic stimulus – people who earn a wage purchase goods and homes.

Raising the Social Security retirement age simply makes sense and is long overdue.

            “On the individual rates we need a simpler, fairer flatter tax system overall. I propose just two rates: 10% and 25%. 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.

People will argue that wealthiest 10% will simply become even wealthier.  Well, that was going to happen anyway, assuming Obama doesn’t achieve his dream of driving the economy off a cliff, into a brick wall and then setting whatever is left on fire as he destroys all wealth in the USA.  Increasing taxes on the wealthiest is a major disincentive to success in America, as well as a wonderful tool for choking the economy.  The re-distributionists will clamor about “fair share” and the like.  Under current scenarios – which would continue under Pawlenty’s plan – if you earn under $50K, you don’t pay any taxes.  None.  Free ride.  But you get the same access to government and enjoy the same government protections as the people who fund the government by paying taxes.

            “In addition, we should eliminate altogether the capital gains tax, interest income tax, dividends tax, and the death tax. Government has no moral or economic basis to claim a second share of the same income. When you deposit a dollar in your bank account, every penny should be forever more yours and your children’s, not the federal government’s."

What a load of truth!  Eliminating the capital gains tax is important to incentivize investment; why invest if you can’t make money?  I agree with the moral issue as well, particularly with regard to the death tax; it invokes the question of whose money is it anyway?  By hitting heirs with an Estate Tax, the implication is that we only own things at the government’s whim – that somehow the government has an ownership interest in our property, both real and personal.  That notion is incongruent with freedom.

Tim Pawlenty continues to impress.

UPDATE:  Pawlenty attacks GM's suggestion that Obama implement a $1/gallon increase in gas tax.