Tim Pawlenty wants the U.S. to aim for an accelerated economic growth rate. In a speech to be delivered at the University of Chicago this morning, Pawlenty will outline the policies that he thinks can reinvigorate the country’s sputtering economy.
“Let’s start with a big, positive goal,” Pawlenty will say, according to excerpts of the speech released by Team Pawlenty this morning. “Let’s grow the economy by five percent, instead of the anemic two percent envisioned currently.”
Among the proposals Pawlenty will push for are cutting the business tax rate to 15 percent from 35 percent and eliminating “special interest handouts, carve-outs, subsidies, and loopholes” in the tax code. He is calling to change the individual tax rate to two rates: 10 percent for those making $50,000 or less (those who do not currently pay income taxes would still be exempt) and couples at $100,000 or less, and a 25 percent rate for all income above those levels. “A one-third cut in the bottom rate to allow younger, middle, and lower-income families to save and build wealth. And a 28 percent cut in the top rate to spur investment and job creation,” Pawlenty will say.
Pawlenty will also call for the elimination of the capital gains tax, interest income tax, dividends tax, and the death tax.
On spending, after touting his own record in Minnesota, Pawlenty will turn his attention to what he has dubbed “The Google Test,” which proposes that “if you can find a good or service on the Internet, then the federal government probably doesn’t need to be doing it.” Programs that don’t pass the Google threshold in Pawlenty’s mind include the “the post office, the government printing office, Amtrak, Fannie and Freddie.”
He will also work to cut the federal budget. “I propose that Congress grant the President the temporary and emergency authority to freeze spending at current levels, and impound up to 5 percent of Federal spending until such time as the budget is balanced,” Pawlenty plans to say. “If they won’t do it…I will. As an example, cutting even 1 percent of overall federal spending for six consecutive years would balance the federal budget by 2017.”
Regulation will also be targeted by Pawlenty, who will argue that all regulation should be “sunset[ed]” unless Congress votes to keep it it in place.
UPDATE: Just to clarify, my understanding is that the 25 percent tax would only apply to income above the $50,000 level for singles or $100,000 for couples. So if a couple made $150,000, they would be taxed at 25 percent for $50,000 and 10 percent for $100,000. Here’s the full excerpt from the speech:
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.
Everything above that would be taxed at 25 percent.