FLASHBACK: Huntsman Implemented Regressive Flat Tax, Wanted To Eliminate Utah’s Corporate Tax

In an interview with Bloomberg News, Jon Huntsman, who until recently was President Obama’s ambassador to China, said that he is very close to officially launching a bid for the 2012 Republican presidential nomination. “We’ve got about all the boxes checked,” he said.

As Travis Waldron laid out, Huntsman has a series of positions that seem like they would put him at odds with the right-wing, including his support for civil unions and his opinion that the 2009 Recovery Act was too small. So Huntsman is banking on his economic record to get him through. During the interview, Huntsman pointed to a tax reform bill he signed in 2007 that moved Utah from a graduated income tax to a flat tax as indicative of his conservative bona-fides:

“I don’t think you grow your way to prosperity through tax increases,” said Huntsman, when asked if Republicans should consider tax increases as part of a solution to the stalemate. “You’ve got to create a framework and environment through tax reform, through regulatory reform” to create businesses and boost job growth, he said…To reinforce his business credentials, Huntsman points to his record in Utah, where he moved the state from a progressive income tax with a top rate of 7 percent to a flat 5 percent tax.

This is exactly the sort of move that might appeal to the conservative base, but as the Institute on Taxation and Economic Policy noted, it “sharply reduced” taxes for Utah’s richest residents, making the Utah tax system more regressive. In Utah, the poorest 20 percent of residents pay more than 9 percent of their income in taxes, while the richest one percent of Utahns pay just 4.9 percent.

As Citizens for Tax Justice noted, Utah is a “case study in why states should reject a flat tax,” because the move to a flat tax blew a hole in Utah’s budget. “Although almost all sources of tax revenue are down in the beehive state [for 2009], the number one culprit is the state’s income tax revenues, which have fallen nearly $300 million (to date),” CTJ found.

Huntsman also tried, unsuccessfully, to completely eliminate his state’s corporate income tax, which would have cost the state more than $200 million. However, lawmakers balked at the price tag. So while Huntsman may differ with his party on some issues, on taxes, he is a doctrinaire conservative, looking to keep tax rates on the rich and corporations as low as possible, if not non-existent.