Americans for Tax Reform

On Taxes – In Their Own Words

First Republican Debate

May 3, 2007

Ronald Reagan Presidential Library

MSNBC and Politico.com

MR. VANDEHEI: Thank you, Congressman. That’s time.

Congressman Paul, Pete from Rochester Hills, Michigan wants to ask you this. If you were president, would you work to phase out the IRS? (Laughter.)

REP. PAUL: Immediately. (Laughter.)

MR. VANDEHEI: That’s what they call a softball.

REP. PAUL: And you can only do that if you change our ideas about what the role of government ought to be. If you think the government has to take care of us from cradle to grave, and if you think our government should police the world and spend hundreds of billions of dollars on a foreign policy that we cannot manage, you can’t get rid of the IRS.But if you want to lower taxes, and if you want the government to quit printing the money to come up with shortfall and cause all the inflation, you have to change policy.

MR. MATTHEWS: Okay.

Governor Thompson, same question; actually you could respond to just about anything at this point. (Laughter.)

MR. THOMPSON: Well, Chris, then I will. I’m the reliable conservative. I vetoed 1,900 things; I reduced taxes by 16-and-a-half billion dollars. I’m from Wisconsin, a blue state, and I won four consecutive times.

I still have a very high popularity appeal, and I’m the one that started welfare reform, reduced welfare caseload in the United States, in the state of Wisconsin, by 93 percent. And I believe that kind of a record will attract Democrats and independents if you stand up and start talking on principles and ideas. Where I think the Republican party lost its way is, we went to Washington to change Washington. Washington changed us.

We forgot to be coming up with new ideas, big ideas like Ronald Reagan. Ronald Reagan had an optimism and a belief that America could be stronger and better tomorrow than it is today, and he instilled that and inculcated that in every American. That’s what we have to do as a party again,

MR. MATTHEWS: Okay, let’s start with an enjoyable down-the-line, okay? I want each candidate to mention a tax he’d like to cut, in addition to the Bush tax cuts, keeping them in effect.

Governor.

MR. ROMNEY:I’d like middle-income Americans to be able to save their money and not have to pay any tax at all on interest, dividends or capital gains. And by the way, we’re all talking about --

MR. MATTHEWS: A zero rate on caps?

MR. ROMNEY:Zero rate on capital gains for middle-income Americans, and by the way, we’re all talking about how anxious we are to veto overspending. I was a governor. I’ve done it hundreds of times. I can’t wait to get my hands on Washington’s budget.

MR. MATTHEWS: Senator.

SEN. BROWNBACK:I’d put forward an alternative flat tax and allow people to choose between the current tax code and system, which doesn’t work, which ought to be taken behind a barn and killed with a dull ax, and an alternate flat tax and let them choose.

MR. MATTHEWS: Governor Gilmore, a tax you’d like to cut.

MR. GILMORE: You know, Chris, I’ve been a governor of Virginia.

I ran on the tax cut proposal. I ran on eliminating a car tax in Virginia. I received terrific opposition to doing that. I kept my word, kept my promise, and we eliminated that car tax.

Now, the question is, who is actually going to do what they say they’re going to do? Where you have been is where you’re going to go, and I have actually lived up to my word, and the answer is the alternative minimum tax, which is continuing to drive people in the middle class in the higher and higher tax --

MR. MATTHEWS: Governor -- Governor Huckabee.

MR. HUCKABEE: Well, I cut taxes 94 times as governor, but I realized tinkering with it doesn’t work. I’d overhaul it. I would work for the fair tax which meets the four criteria: flatter, fairer, finite, family-friendly. We’d get rid of the IRS. We’d get rid of all capital gains -- income, corporate -- and we’d have a consumption tax. The fair tax proposal, I believe, offers the best opportunity for all levels of America.

MR. MATTHEWS: Congressman, your turn.

REP. HUNTER: Absolutely. Chris, you know, right now our manufacturers are getting killed. We’re seeing manufacturing move offshore because the dumb trade deal that we signed with the rest of the world allows all of our exports to be taxed twice, while their exports to us are not taxed at all. The only way that we can even come close to leveling that playing field is to eliminate manufacturing taxes. So eliminate all taxes on Americans who will stay in the United States and make products and hire American workers.

MR. MATTHEWS: Governor.

MR. THOMPSON: Thank you very much.

I’m excited about this question, because I was governor of Wisconsin and vetoed 1,900 items 1,900 times, reduced taxes $16.4 billion. I think the biggest problem we got in America is the alternative minimum tax that’s bringing more middle-income people in.

Let’s put it in, let’s have the people have a flat tax and have the option of paying whichever is least.

MR. MATTHEWS: Senator McCain?

SEN. MCCAIN: I give the president of the United States the line- item veto on these bills as well as spending bills. The Alternative Minimum Tax is obviously eating Americans alive, and it’s got to be repealed.

Another one. Another one I think is important is a $3,000 tax credit for people to be able to purchase health insurance, so low- income Americans will have access to health care, which is an amazing and difficult problem today; and a simpler, flatter fair tax so that Americans don’t have to spend $140 billion, as they just did last April, to prepare tax reform -- returns

MR. MATTHEWS: Okay. Dr. Paul.

REP. PAUL: Well, in my first week, I already got rid of the income tax. In my second week -- (laughter) -- I would get rid of the inflation tax, the tax that nobody talks about. We live way beyond our means with a foreign policy we can’t afford and an entitlement system that we have encouraged. We print money for it, the value of the money goes down, and poor people pay higher prices. That is a tax. It’s the transfer of wealth from the poor and the middle class to Wall Street. Wall Street’s doing quite well, but the inflation tax is eating away at the middle class of this country. We need to get rid of the inflation tax with sound money.

MR. MATTHEWS: Mayor Giuliani.

MR. GIULIANI:We have to adjust the AMT; that has to be reduced. We have to get rid of the death tax, which is going to go to zero in 2010, which is going to create an incentive. I can’t imagine what kind of an incentive it’s going to create. It’s going to go to zero in 2010, and then in 2011, it’s going to go to 55 percent. And we have to make sure that the tax cuts that went into effect at that level remains.

Otherwise, we’re going to have one of the biggest tax increases in history in 2011. And I would look to try to regularize the rates and look for some marginal reduction even beyond what we’re doing right now.