NCPA - National Center for Policy Analysis


January 25, 2008

There's no question that Rudy Giuliani offers the best tax plan of any of the presidential candidates, says Steve Forbes, president and CEO of Forbes Inc. and editor in chief of Forbes Magazine.

One of Giuliani's proposals is the one-page Fair and Simple Tax Form (FAST).  Under FAST:

  • There will be only three tax rates -- 10 percent, 15 percent and 30 percent; taxpayers who prefer to use the existing forms will remain free to do so.
  • Prized deductions for mortgage payments, state and local taxes, charitable contributions, and child tax credits will all be preserved on the FAST form.

The FAST form is the centerpiece of Giuliani's tax plan, but it contains many other advantages, says Forbes:

  • Makes the Bush tax cuts permanent.
  • Cuts the corporate tax rate, currently second-highest in the industrialized world, to 25 percent from 35 percent, helping American businesses compete while protecting and creating American jobs.
  • Reinstates the Research and Development Tax Credit, a spur to American innovation that Democrats recently let expire.

Other features:

  • Repeals the death tax, which unfairly forces relatives of the recently deceased to sell small family farms or businesses to pay the tax collector.
  • Cuts the capital gains tax to 10 percent from 15 percent, sparking private-sector investment and economic prosperity.
  • Indexes the Alternative Minimum Tax for inflation and puts it on the course to eventual elimination.

Giuliani's reforms also include a trio of tax-free savings vehicles to encourage middle-class saving: a retirement savings account; a general-purpose lifetime savings account; and a lifetime skills account (for training and education), says Forbes.  All three would function as Roth-style accounts (funded with after tax income, but subject to no taxes upon withdrawal) and would be available to all Americans, regardless of income level.

Source: Steve Forbes, "The Giuliani Tax Cut," Wall Street Journal, January 24, 2008.

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