Republican 2012 presidential hopeful Tim Pawlenty is delivering an address in Chicago today where he will lay out his campaign’s official economic plan. Despite the fiscal woes that he left behind after his tenure as governor of Minnesota, Pawlenty has been banking on an economic message to help him in the GOP primary.
Pawlenty’s economic plan, according to excerpts from his speech that were released to the media, will include plenty of red meat for conservatives, including calling for the privatization of Amtrak. Pawlenty will also call for a massive slew of tax cuts:
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. […]
In addition, we should eliminate altogether the capital gains tax, interest income tax, dividends tax, and the death tax.
Pawlenty’s corporate tax cut is actually deeper than that favored in the House Republican budget, while he envisions the same massive income tax cut for the rich that the House Republicans desire. National Journal’s Tim Fernholz called the tax cuts “breathtaking,” noting that “Pawlenty’s variant would attract even less [than 16 percent of GDP in revenue]. With government spending standing at about 25 percent of GDP this year and averaging about 20 percent, the balanced budgets Pawlenty promises imply massive spending cuts.” The Tax Policy Center found that the House Republicans’ less audacious (but still radical) tax plan would cost about $2.9 trillion over ten years.
As if a huge rate cut weren’t enough, Pawlenty endorses further giveaways to the rich via eliminating the capital gains and estate taxes. Currently, about 68 percent of capital gains taxes are paid by the richest one percent of Americans, and about 90 percent are paid by the richest ten percent. Meanwhile, less than one-quarter of one percent of the richest households will see any estate tax liability. Eliminating these taxes is nothing but a giant windfall for the rich.
Pawlenty is basically doubling down on the failed economic policies of the last Republican administration, only going for tax cuts that are much bigger than anything President Bush ever got through Congress.