We retired Tax Justice Blog in April 2017. For new content on issues related to tax justice, go to www.justtaxesblog.org
Former Pennsylvania senator and now Republican presidential candidate Rick Santorum has long touted himself as a champion of the “blue-collar” crowd, yet his record on tax policy indicates he’s more interested in championing hedge-fund moguls.
During his time in the U.S. senate, Santorum voted continually for the budget-busting and extremely regressive Bush tax cuts, earning him an “F” in Citizens for Tax Justice’s (CTJ) congressional scorecard. Nearly a third of the benefits of the Bush tax cuts went to just the wealthiest 1 percent of taxpayers and added $2.5 trillion to the deficit through 2010.
Not only did Santorum help usher in the Bush tax cuts, 85 percent of which have been made permanent, as a presidential candidate in 2012 he also promised to double down on this blunder by proposing another $9.4 trillion in regressive tax cuts over a decade. A preliminary CTJ analysis of Santorum’s 2012 tax plan found that the wealthiest one percent of taxpayers would receive an average annual tax break of $217,000, while the middle fifth of Americans would receive an average tax break of $2,160. Because the tax cuts aren’t paid for, the plan would require either draconian cuts in basic public services or would it would explode the deficit going forward.
During a GOP primary debate in 2012, the moderator asked if any of the candidates would support a deal that included ten dollars in spending cuts for every one dollar in new tax revenues, at which point Santorum joined the other candidates to affirm that he would absolutely reject such a deal.
In the years since his 2012 run, Santorum has spelled out a series of problematic corporate tax cuts he supports. For example, in his 2014 book “Blue Collar Conservatives,” Santorum advocates cutting the corporate income tax rate from 35 percent to 20 percent for all corporations except for manufacturers, for which he proposed a zero tax rate.
Like Santorum’s other tax proposals, his corporate tax plan would substantially increase the deficit, since even eliminating all corporate tax expenditures (with the exception of “deferral” on “foreign” profits) would only allow the rate to be lowered to 29.4 percent without losing revenue over the long term. Although Santorum does vaguely propose to eliminate most corporate tax expenditures, he would retain and double the size of the broken research credit, while creating a massive new and economically distortive tax expenditure by exempting manufacturers and expanding the exemption of foreign corporate profits from taxation. Altogether, Santorum’s corporate tax plan would blow a massive hole in the budget to provide a large windfall to corporations, which already face relatively low tax levels.
In contrast to his slew of regressive proposals, Santorum has recently proposed one progressive tax change: doubling the child tax credit. Doubling the credit could provide a much needed boost to many families, although not to those with the lowest incomes. Such a substantial expansion to the credit could also add to the deficit if revenue is not raised in some other way to pay for it. In a recent interview, Santorum suggested that this idea could be a potential opportunity for the left and right to come together to help working families.
Finally, while he has not explicitly endorsed the so-called “Fair Tax,” a regressive plan to replace all federal taxes with a national sales tax, in his book he wrote that there is “much to commend it as a starting point for discussion.” A study by the Institute on Taxation and Economic Policy (ITEP) found that a revenue-neutral national sales tax would increase taxes on the bottom 80 percent of taxpayers by an average of $3,200 a year, while cutting taxes by an average of $225,000 a year on the top one percent. This radically regressive tax shift is not a sound “starting point” for discussion.
Santorum’s overall tax policy platform would likely increase the deficit, reduce funding for basic services and do nothing for working families.