Original Post
June 7, 2011
By Bernie Becker
Sen. Orrin Hatch (R-Utah) seems pretty amenable to the tax plan proposed by Tim Pawlenty, the former Minnesota governor and Republican candidate for president.
The left-leaning Center for Tax Justice? Not so much.
Pawlenty, in a Tuesday speech at the University of Chicago, called for slashing the top corporate and individual tax rate, both of which currently stand at 35 percent, to 15 percent and 25 percent, respectively.
The former two-term governor also called for eliminating tax credits and deductions, as well as taxes on dividends, interest income, capital gains and the estate tax – all part of his plan to ramp up economic growth. (The Hill’s Jordan Fabian has more on the speech here.)
Hatch told reporters Tuesday that he thought it was “feasible” to reduce the top corporate rate to 15 percent, while also sounding enthusiastic about rolling back taxes on capital gains.
“I’d love to see it at 15,” said Hatch, who added that he thought a drastically lower rate could entice more multinationals to establish their headquarters here.
But Hatch, the ranking member on the Senate Finance Committee, also noted that more policymakers pushing for tax reform had been eyeing a top rate more like 25 percent. (That includes Reps. Dave Camp (R-Mich.), the chairman of the House Ways and Means Committee, and Paul Ryan (R-Wis.), the chairman of the House Budget Committee.)
For its part, Citizens for Tax Justice, a group with significant ties to organized labor, released a study declaring that Pawlenty’s plan would amount to a 41 percent average tax cut for millionaires.
On the individual side, Pawlenty proposes to install a 10 percent rate for income up to $50,000 for individuals or $100,000 for married couples. All income above that would be taxed at the 25 percent rate.
CTJ – which assumed in its analysis that the Pawlenty proposal would be paired with the elimination of all itemized deductions and tax credits – said that would mean that a taxpayer with annual income of $10 million or more a year would see a 46 percent tax cut.