Rick Santorum on Tax Reform

Republican Jr Senator (PA); 2012 presidential frontrunner


My 10% flat tax brings 3.5M jobs back to America

My plan will bring three and a half million jobs into this country, and we have provisions in the flat tax for the corporate side that actually has a phase-in of manufacturing [taxes]. We're going to also have a repatriation provision which says that if you have money overseas, bring it back. The most you'll be taxed is 10%, so invest it in America. Create jobs here in America with money that's sitting overseas.
Source: 2016 Fox News Republican Undercard debate in Iowa , Jan 28, 2016

20% flat tax on all income of all types

Q: What is the highest percentage, all in, in the way of taxes, that any American should have to pay and what is the lowest? I'd like to to hear from each of you.

SANTORUM: I have a 20 percent flat tax. That's on all income--so capital gains, corporations, individuals, 20 percent. I think that's a fair number. I don't allow for deductibility of state and local taxes, which will require state and local taxes to go down. So the answer is, 20 percent and probably 33 percent overall.

Gov. JINDAL: Under our tax plan, the top rate is 25%, [then for the middle class] 10%, [then everyone else pays] 2%.

Gov. CHRISTIE: Our plan puts forward a rate of 28% for those who are making the most and 8% on the low end. We get rid of all deductions except for the home mortgage interest deduction and the charitable contribution deduction. That means getting rid of the state and local income tax deduction.

Source: Fox Business/WSJ Second Tier debate , Nov 10, 2015

My tax plan reduces taxes for every income bracket

If you look at my flat tax, it actually takes the best of what many have been advocating for a long time, which is a strong pro-growth tax code. We have a system that has a low single rate, but we take care of American families. I'm talking about $2,750 per person. That means a family of four has a $11,000 dollar tax credit.
Source: GOP "Your Money/Your Vote" 2015 CNBC 2nd-tier debate , Oct 28, 2015

20/20 tax plan: all income treated the same

Q: Jeb Bush has proposed a tax reform plan, and in it, he limits deductions, including the popular home mortgage deduction. Would you?

SANTORUM: Actually, I'm going to be proposing a plan, I call it the 20/20 perfect vision for America as flat tax, a 20% flat tax on income, 20% flat tax on capital gains and on corporations. We eliminate all the deductions and special interest provisions. We deal with the carried interest issue, because everybody pays the same 20%. So, there's no advantage as to how you take your income. That will create growth. We put a 20% rate on corporations; then we're competitive with almost every country in the world. We allow for expensing; we have a three year phase in. We start at zero for manufacturers, phase it up to 20. So, the answer is, we're going to lower, and flatten taxes. We're going to put government on a budget: a 10% across the board cut.

Source: 2015 Republican two-tiered primary undercard debate on CNN , Sep 16, 2015

Just two income tax rates: 10% and 28%

Q: What is the highest federal income tax any American should have to pay? We are looking for a number.

PERRY: Seven percent flat tax. Simple. Keep it simple.

SANTORUM: Well, my plan has two rates, 10 and 28 percent, which is the highest rate under Ronald Reagan when he cut taxes.

ROMNEY: I would like 25 percent, but right now it's at 35, so people better pay what is legally required. But ultimately let's get it down to as low as we possibly can, if it's 20, if it's 25 but paying more than 25 percent, I think, is taking too much out of our pockets.

GINGRICH: I would like to see it be a flat tax at 15 percent and I would like to see us reduce government to meet the revenue, not raise revenue to meet the government.

PAUL: Well, we should have the lowest tax that we've ever had, and up until 1913 it was 0%. What's so bad about that?

Source: Fox News debate on MLK Day in Myrtle Beach, SC , Jan 16, 2012

Simplify tax code: just 5 deductions; everything else goes

HUNTSMAN: I would have done what Simpson-Bowles recommended. I would have cleaned out all of the loopholes and the deductions that weigh down this country to the tune of $1.1 trillion.

Q: [to Santorum]: How would you raise the kind of revenues called for in the Simpson-Bowles Commission?

SANTORUM: Our plan puts together a package that focuses on simplifying the tax code and I agree with Gov. Huntsman on that. Five deductions: Health care, housing, pensions, children and charities. Everything else goes. We focus on the pillars that have broad consensus of this country in the important sectors of our economy, including our children. The other side is the corporate side. Cut it in half, to 17.5%. But I do something different than anybody else. I'm very worried about a sector of our economy that has been under fire. I come from southwestern Pennsylvania, the heart of the steel country, the heart of manufacturing. And it's been devastated because we are uncompetitive.

Source: WMUR 2012 GOP New Hampshire debate , Jan 7, 2012

84% of Americans pay more tax if we have national sales tax

Q: Will Cain's 9-9-9 plan for a national sales tax raise taxes?

SANTORUM: 84% of Americans would pay more taxes under his plan. That's the analysis. And it makes sense, because when you don't provide a standard deduction, when you don't provide anythin for low-income individuals, and you have a sales tax and an income tax and a value-added tax, which is really what his corporate tax is, we're talking about major increases in taxes on people. He also doesn't have anything that takes care of the families A single person pays as much in taxes as a man and a woman raising three children. Ever since we've had the income tax in America, we've always taken advantage of the fact that we want to encourage people to have children and not have to pay more already to raise children, but also gave some breaks for families. He doesn't do that in this bill. We've seen that in Europe. Boom, birth rates went into the basement. I give Cain credit for starting a debate, but it's not good for families.

Source: GOP 2011 primary debate in Las Vegas , Oct 18, 2011

Changing estate tax would cost $100B, not save $730B

Q: How would you get a balanced budget?

CASEY: When it comes to the budget, what’s missing principally is a lack of fiscal responsibility. [We should] repeal the tax cut for people making over $200,000 a year. That change, in addition to an estate tax change, could get you about $730 billion over 10 years.

Q: How does that balance the current budget?

CASEY: You can’t balance a budget in one year. They’ve put us in such a fiscal hole, it will take many years.

Q: Well, give me a couple ideas.

SANTORUM: Changing the estate tax cut would cost money over the long term, not save money. The death tax snaps back to the old death tax in 2011, and it would cost $100 million just to do the changes that he suggested. I’m for not taking more people’s money when they die.

Source: PA 2006 Senate Debate, Tim Russert moderator (X-ref Casey) , Sep 3, 2006

More child credit for larger families earning over $110,000

We need a tax policy that stops discriminating against families and starts favoring them. That means not only making the repeal of the marriage penalty permanent, but increasing both the child credit and the deduction for children. Even the $1,000 credit and the dependent child deduction offset only a small portion of the costs associated with raising a child today.

That was not always the case. In 1950, before government exploded, the average tax burden on the American family was 2% of its income. Today the burden is 25%, over half of which is Social Security and Medicare taxes. And the burden is often heavier for larger families, because of the phasing out of the child credit for families with a total income of $110,000. Now, before you start complaining about tax breaks for the rich, answer me this: Is a family making $110,000 with one child as well off economically as a family with 8 children at that same salary? Obviously not, but the tax code phases out the child credit all the same.

Source: It Takes A Family, by Sen. Rick Santorum, p. 96 , Apr 30, 2006

Death should not be a taxable event

Death should not be a taxable event, but it is. What we are suggesting is that over a 10-year period of time we phase out estate taxes on people who die. I think most Americans would agree that if someone has a piece of property and they die and pass it on to the next generation, when that next generation sells the property, they should be taxed on the capital gains. But if in fact the person dies, it should not be a taxable event on the next generation. The greatest impact of that is on the family farm or small business--they want to pass that business on to the next generation after they die. They have to sell the farm or the business so they can pay the taxes that are due. Whom does that hurt? Obviously, it hurts the businessperson. But how about the people who work for that business, where that business has to go out of business simply to pay taxes or where the business has to be sold simply to pay taxes. So I think what we are talking about here is tax relief for every taxpayer.
Source: Santorum speech in "A Senator Speaks Out", p. 18-19 , Feb 14, 2001

Tax burden increases inequities & decreases savings

I want to talk about the tax burden that American families feel today and the drastic need for fundamental and comprehensive reform of our Tax Code. Quite clearly, the tax burden over the past few decades has greatly increased; the inequities of the Code have been exacerbated; and the incentives for savings have largely diminished. I hear the demand for a fairer, simpler tax system and an even greater demand by taxpayers to keep more of what they earn. I strongly believe that Congress must continue to explore comprehensive simplification of our Tax Code. I am pleased today to join Senator Dan Coats as a cosponsor of his legislation to provide not only for middle-class tax relief, but also to encourage increased personal investment and savings while balancing the growth of Federal spending in general.
Source: Santorum speech in "A Senator Speaks Out", p. 12 , Apr 17, 1996

Tax credits are for families who pay taxes

The Senator from Arkansas said 15 million children are not going to benefit as a result of the child tax credit. What he did not tell you is those 15 million children have parents who pay no income tax. In fact, the majority of those--first, for all of those 15 million children, their parents receive an earned-income tax credit, most of which is not to pay them for the income tax they pay. They paid no income taxes. But it is to pay them for their Social Security taxes that they pay. And in the majority of cases it is to give them money beyond even their Social Security taxes. There is a statistic that, if you listen, on the face you would say, "Boy, this is not fair. We are not helping out the poor folks here in this country who need help." Wrong. We have the earned-income tax credit that does just that. This is for families who pay taxes. That is what the tax credit is for, for families who pay taxes. I just wanted to set the record straight on that.
Source: Santorum speech in "A Senator Speaks Out", p. 87 , Nov 15, 1995

Voted YES on supporting permanence of estate tax cuts.

Increases the estate tax exclusion to $5,000,000, effective 2015, and repeals the sunset provision for the estate and generation-skipping taxes. Lowers the estate tax rate to equal the current long-term capital gains tax rate (i.e., 15% through 2010) for taxable estates up to $25 million. Repeals after 2009 the estate tax deduction paid to states.

Proponents recommend voting YES because:

The permanent solution to the death tax challenge that we have today is a compromise. It is a compromise that prevents the death rate from escalating to 55% and the exclusion dropping to $1 million in 2011. It also includes a minimum wage increase, 40% over the next 3 years. Voting YES is a vote for that permanent death tax relief. Voting YES is for that extension of tax relief. Voting YES is for that 40% minimum wage increase. This gives us the opportunity to address an issue that will affect the typical American family, farmers, & small business owners.

Opponents recommend voting NO because:

Family businesses and family farms should not be broken up to pay taxes. With the booming economy of the 1990s, many more Americans joined the ranks of those who could face estate taxes. Raising the exemption level and lowering the rate in past legislation made sense. Under current law, in my State of Delaware, fewer than 50 families will face any estate tax in 2009. I oppose this legislation's complete repeal of the estate tax because it will cost us $750 billion. Given the world we live in today, with clear domestic needs unmet, full repeal is a luxury that we cannot afford.

To add insult to this injury, the first pay raise for minimum wage workers in 10 years is now hostage to this estate tax cut. We are told that to get those folks on minimum wage a raise, we have to go into debt, so that the sons and daughters of the 7,000 most fortunate families among us will be spared the estate tax. We must say no to this transparent gimmick.

Reference: Estate Tax and Extension of Tax Relief Act; Bill H.R. 5970 ; vote number 2006-229 on Aug 3, 2006

Voted YES on permanently repealing the `death tax`.

A cloture motion ends debate and forces a vote on the issue. In this case, voting YES implies support for permanently repealing the death tax. Voting against cloture would allow further amendments. A cloture motion requires a 3/5th majority to pass. This cloture motion failed, and there was therefore no vote on repealing the death tax.
Reference: Death Tax Repeal Permanency Act; Bill HR 8 ; vote number 2006-164 on Jun 8, 2006

Voted NO on $47B for military by repealing capital gains tax cut.

To strengthen America's military, to repeal the extension of tax rates for capital gains and dividends, to reduce the deficit, and for other purposes. Specifically, a YES vote would appropriate $47 billion to the military and would pay for it by repealing the extension of tax cuts for capital gains and dividends to 2010 back to 2008. The funds wuold be used as follows:
Reference: Tax Relief Extension Reconciliation Act; Bill S Amdt 2737 to HR 4297 ; vote number 2006-008 on Feb 2, 2006

Voted YES on retaining reduced taxes on capital gains & dividends.

Vote to reduce federal spending by $56.1 billion over five years by retaining a reduced tax rate on capital gains and dividends, as well as.
Status: Bill passed Bill passed, 66-31
Reference: Tax Relief Extension Reconciliation Act; Bill HR 4297 ; vote number 2006-010 on Feb 2, 2006

Voted YES on extending the tax cuts on capital gains and dividends.

This large piece of legislation (418 pages) includes numerous provisions, generally related to extending the tax cuts initiated by President Bush. This vote was on final passage of the bill. The specific provisions include:
  1. Extension Of Expiring Provisions: for business expenses, retirement savings contributions, higher education expenses, new markets tax credit, and deducting state and local sales taxes.
  2. Provisions Relating To Charitable Donations, and Reforming Charitable Organizations
  3. Improved Accountability of Donor Advised Funds
  4. Improvements in Efficiency and Safeguards in IRS Collection
Reference: Tax Relief Act of 2005; Bill S. 2020 ; vote number 2005-347 on Nov 18, 2005

Voted YES on $350 billion in tax breaks over 11 years.

H.R. 2 Conference Report; Jobs and Growth Tax Relief Reconciliation Act of 2003. Vote to adopt the conference report on the bill that would make available $350 billion in tax breaks over 11 years. It would provide $20 billion in state aid that consists of $10 billion for Medicaid and $10 billion to be used at states' judgment. The agreement contains a new top tax rate of 15 percent on capital gains and dividends through 2007 (5 percent for lower-income taxpayers in 2007 and no tax in 2008). Income tax cuts enacted in 2001 and planned to take effect in 2006 would be accelerated. The child tax credit would be raised to $1,000 through 2004. The standard deduction for married couples would be double that for a single filer through 2004. Tax breaks for businesses would include expanding the deduction that small businesses could take on investments to $100,000 through 2005.
Reference: Bill HR.2 ; vote number 2003-196 on May 23, 2003

Voted NO on reducing marriage penalty instead of cutting top tax rates.

Vote to expand the standard deduction and 15% income tax bracket for couples. The elimination of the "marriage penalty" tax would be offset by reducing the marginal tax rate reductions for the top two rate bracket
Reference: Bill HR 1836 ; vote number 2001-112 on May 17, 2001

Voted NO on increasing tax deductions for college tuition.

Vote to increase the tax deduction for college tuition costs from $5,000 to $12,000 and increase the tax credit on student loan interest from $500 to $1,000. The expense would be offset by limiting the cut in the top estate tax rate to 53%.
Reference: Bill HR 1836 ; vote number 2001-114 on May 17, 2001

Voted YES on eliminating the 'marriage penalty'.

Vote on a bill that would reduce taxes on married couples by increasing their standard deduction to twice that of single taxpayers and raise the income limits on both the 15 percent and 28 percent tax brackets for married couples to twice that of singles
Reference: Bill HR.4810 ; vote number 2000-215 on Jul 18, 2000

Voted YES on across-the-board spending cut.

The Nickles (R-OK) Amdendment would express the sense of the Senate that Congress should adopt an across-the-board cut in all discretionary funding, to prevent the plundering of the Social Security Trust Fund
Status: Amdt. Agreed to Y)54; N)46
Reference: Nickles Amdt #1889; Bill S. 1650 ; vote number 1999-313 on Oct 6, 1999

Voted YES on requiring super-majority for raising taxes.

Senator Kyl (R-AZ) offered an amendment to the 1999 budget resolution to express the sense of the Senate on support for a Constitutional amendment requiring a supermajority to pass tax increases.
Status: Amdt Agreed to Y)50; N)48; NV)2
Reference: Kyl Amdt #2221; Bill S Con Res 86 ; vote number 1998-71 on Apr 2, 1998

Rated 81% by NTU, indicating a "Taxpayer's Friend" on tax votes.

Santorum scores 81% by NTU on tax-lowering policies

Every year National Taxpayers Union (NTU) rates U.S. Representatives and Senators on their actual votes—every vote that significantly affects taxes, spending, debt, and regulatory burdens on consumers and taxpayers. NTU assigned weights to the votes, reflecting the importance of each vote’s effect. NTU has no partisan axe to grind. All Members of Congress are treated the same regardless of political affiliation. Our only constituency is the overburdened American taxpayer. Grades are given impartially, based on the Taxpayer Score. The Taxpayer Score measures the strength of support for reducing spending and regulation and opposing higher taxes. In general, a higher score is better because it means a Member of Congress voted to lessen or limit the burden on taxpayers. The Taxpayer Score can range between zero and 100. We do not expect anyone to score a 100, nor has any legislator ever scored a perfect 100 in the multi-year history of the comprehensive NTU scoring system. A high score does not mean that the Member of Congress was opposed to all spending or all programs. High-scoring Members have indicated that they would vote for many programs if the amount of spending were lower. A Member who wants to increase spending on some programs can achieve a high score if he or she votes for offsetting cuts in other programs. A zero score would indicate that the Member of Congress approved every spending proposal and opposed every pro-taxpayer reform.

Source: NTU website 03n-NTU on Dec 31, 2003

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