On 6/7/11, Tim Pawlenty, former Governor of Minnesota and candidate for president in 2010, proposed a far-ranging blueprint for economic growth, a new tax code, a balanced budget, and renewed American innovation and investment.
The following are some excerpts:
“Let’s start with a big, positive goal. Let’s grow the economy by five percent, instead of the anemic two percent envisioned currently. … We should cut the business tax rate by more than half. I propose reducing the current rate from 35% to 15%. … 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. …
“I know government can cut spending, because I did it in Minnesota. I cut state spending in real terms for the first time in our state’s history. … 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.”
1. Establish a new tax code for businesses, individuals, and families
2. Cut the corporate tax rate from 35% to 15% to spur investment and American competitiveness in the global economy
3. End the era of crony capitalism by eliminating corporate tax loopholes, subsidies and giveaways to level the playing field
4. Providing the option for small and medium sized businesses to pay the corporate rate
5. Replace the individual tax system with two brackets creating a flatter and fairer tax structure
Individuals making $50,000 or higher will be taxed at 25%
Individuals making $50,000 or lower will be taxed at 10%
Married couples making $50,000 or lower will have an effective 0% tax rate
6. Eliminate capital gains tax and dividend tax to encourage investment and saving
7. Eliminate estate tax and interest income tax
8. Pass a Constitutional amendment that requires a balanced federal budget and caps federal spending as a percentage of our economy around the historic average of 18% of GDP
9. Propose that Congress grant the President temporary and emergency authority to freeze spending at current levels, and impound up to 5% of Federal spending until the budget is balanced if Congress fails to cut spending
10. Apply the “Google Test” to government agencies. If you can find a good or service on the Internet, then the federal government probably doesn’t need to be doing it.
11. Employ Lean Six Sigma throughout all federal agencies saving up to 20%
12. Require sunsetting of all federal regulations unless specifically sustained by a vote of Congress
13. Ratify trade agreements with South Korea, Colombia and Panama
14. Double American exports by pursuing new bilateral free trade agreements
15. Strengthen the American dollar by limiting the mandate of the Federal Reserve to focus only on inflation and price stability.
This sounds like a reasonable blueprint to turn our economy around. The Democrats have already denounced it, and the Republicans have said little about it. To me, this and the Ryan plan together would stop our march into collectivism and allow us, once more, to become the economic engine we have always been.