Former Minnesota Gov. Tim Pawlenty (R), who is vying for the Republican presidential nomination, laid out his economic plan this week. The plan has drawn well-deserved ridicule from both the right and left for its “impossible” growth assumptions and its reliance on huge tax cuts that would be three times more expensive than the Bush tax cuts and dramatically skew towards the wealthy.
Part of Pawlenty’s tax plan involves cutting the corporate tax rate from 35 percent to 15 percent, a deeper cut than the one embraced by House Republicans in the radical budget that they passed. In an interview with Bloomberg News, Pawlenty said this reduction will be paired with clearing out “all” of the credits and deductions clogging up the corporate tax code:
We will reduce the corporate tax rate from 35 percent to 15 percent. We will get rid of all the deductions, credits, or exemptions, and you will compete not based on your connections to a congressman, but connections whether you can convince consumers if you have a good product. If you cannot do that, you should not be in business.
But just last month, Pawlenty was singing a very different tune on corporate tax credits. In fact, when asked if he would cut the $4 billion in subsidies that are given to oil companies every year, Pawlenty responded that such a move would be “ludicrous.” “ I mean the worst thing we could do is raise the cost burden on costs on energy and oil,” Pawlenty said. “It’s preposterous.”
But if Pawlenty isn’t willing to take on one of the most obvious, egregious examples of waste in the corporate tax code, how can he credibly say he supports eliminating “all” credits? For that matter, is he going to end deferral, which allows corporations to delay taxes on their overseas profits indefinitely, encouraging the outsourcing of jobs?
Pawlenty keeps claiming that his campaign is “not about telling people just what they want to hear. It’s about telling the truth.” But it seems that he can’t figure out what the truth is when it comes to his views on corporate taxes.