The plan I am proposing is far-reaching yet realistic. It will bring us a federal government that does what it needs to, that lives within its means, and that uses pro-growth tax policy to raise necessary funds and not a dollar more.
Mitt Romney at the WSJ:
I am prepared to make the difficult decisions our nation needs. I favor deep cuts in federal spending, and I’ve previously outlined exactly where I would cut and how I would reform entitlements to strengthen them for future generations. But we can’t look at spending in isolation.
I believe we must make the tax code simpler and fairer. We must reduce tax rates for job creators to promote economic growth. And we must still raise enough revenue to stop the endless borrowing that threatens American prosperity.
First, I will make an across-the-board, 20% reduction in marginal individual income tax rates. This bold stroke reduces the tax on the next dollar of income earned by all taxpayers. It also reduces tax rates for the many businesses that pay at individual rates and employ the majority of private-sector American workers, thus driving significant increases in hiring and wages.
Second, I will reduce the corporate tax rate to 25% from 35%, transition from a world-wide taxation system to a territorial one, and make the R&D tax credit permanent. These steps will unleash significant domestic investment, attract more foreign investment, and make the U.S. economy competitive with others around the globe. They will not only spur significant job creation, but also raise wages for American workers.
Third, I will promote savings and investment by maintaining the low 15% rate on capital gains, interest and qualified dividends, and eliminate the tax entirely for those with annual income below $200,000. These low tax rates will create powerful incentives for Americans to save and invest, while encouraging business investment and economic growth.
Fourth, I will take long overdue steps to correct failures in the tax code. I will abolish the death tax, whose primary effect today is to foster elaborate schemes for transferring wealth. I will also repeal the Alternative Minimum Tax, which was intended to make the code simpler and fairer but has accomplished precisely the opposite.
Fifth, I will bring stability to the tax code by making these changes permanent. People and businesses should not live in perpetual uncertainty, waiting to see what changes the annual partisan battles in Washington will make to what they owe. One recent study estimated that simply returning policy certainty to pre-Obama levels could create 2.5 million jobs in less than two years.
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"Romney: A Tax Reform to Restore America’s Prosperity"