Reinvent ‘Monstrous’ Tax Code: Ex-Treasury Secretary O’Neill

Morphh — Sat, 18 Aug 2012 21:51:27 +0000

[Author's note: The following is an article that originally appeared on CNBC.com]:

The U.S. economy needs a simplified and more “progressive” tax code that would abolish income and corporate taxes, while bringing in enough revenues to pay for the government’s obligations, former Treasury Secretary Paul O’Neill told CNBC’s “Squawk Box” on Friday.

“Our tax code proves we are not an intelligent people because no intelligent people would have invented this thing,” said O’Neill, who called the current tax system, often criticized as bloated and cumbersome, a “monstrosity.”

In the context of the overall debate about fiscal reform, O’Neill called for a “progressive…value-added tax” that could help boost economic activity by substituting for corporate, payroll, and individual income taxes.

O’Neill, who was unceremoniously drummed out of his job as Treasury Secretary under former president George W. Bush, described himself as unenthusiastic about either of the major contenders for the presidency.

The former head of Alcoa said he would “like to” support the budget proposals of either President Barack Obama or his Republican challenger, Mitt Romney.

However, he said that “none of the plans on the table would get us a balanced budget again until 2040. I would like there to be a balanced budget in my lifetime.”

Mitt's Plan

Morphh — Fri, 22 Jun 2012 14:00:13 +0000

Here is Mitt’s Plan – What do you think?
Romney -> Issues -> Tax

Reducing and stabilizing federal spending is essential, but breathing life into the present anemic recovery will also require fixing the nation’s tax code to focus on jobs and growth. To repair the nation’s tax code, marginal rates must be brought down to stimulate entrepreneurship, job creation, and investment, while still raising the revenue needed to fund a smaller, smarter, simpler government. The principle of fairness must be preserved in federal tax and spending policy.

Individual Taxes

America’s individual tax code applies relatively high marginal tax rates on a narrow tax base. Those high rates discourage work and entrepreneurship, as well as savings and investment. With 54 percent of private sector workers employed outside of corporations, individual rates also define the incentives for job-creating businesses. Lower marginal tax rates secure for all Americans the economic gains from tax reform.

Make permanent, across-the-board 20 percent cut in marginal rates

Maintain current tax rates on interest, dividends, and capital gains

Eliminate taxes for taxpayers with AGI below $200,000 on interest, dividends, and capital gains

Eliminate the Death Tax

Repeal the Alternative Minimum Tax (AMT)

Corporate Taxes

The U.S. economy’s 35 percent corporate tax rate is among the highest in the industrial world, reducing the ability of our nation’s businesses to compete in the global economy and to invest and create jobs at home. By limiting investment and growth, the high rate of corporate tax also hurts U.S. wages.

Cut the corporate rate to 25 percent

Strengthen and make permanent the R&D tax credit

Switch to a territorial tax system

Repeal the corporate Alternative Minimum Tax (AMT)

Fair Tax Blog » Other Tax Plans

Reinvent ‘Monstrous’ Tax Code: Ex-Treasury Secretary O’Neill

Mitt's Plan