NEW YORK (Reuters) - Republican presidential hopeful Rudy Giuliani has proposed what he called a multitrillion-dollar tax cut that would lower the corporate tax rate from 35 percent to 25 percent and reduce the capital gains tax from 15 percent to 10 percent.
The proposal, unveiled by Guiliani's campaign on Wednesday, would preserve the 2001 and 2003 tax cuts enacted by President George W. Bush, eliminate the estate tax and give taxpayers the option of choosing a simplified tax form with three tax brackets with a maximum bracket of 30 percent.
The plan is already being criticized as if it has any chance of becoming law:
"What we need right now is a very targeted stimulus plan that goes right to the heart of the problems we face, which can all be traced to the distress in the subprime mortgage market," said Ward McCarthy, managing director of Stone & McCarthy Research Associates, in Princeton, New Jersey.
"Quite frankly, these grandiose, broad-based fiscal proposals now being scattered about in shotgun fashion by a variety of politicians are completely off the mark."
Actually, I prefer grandiose things that make sense over simple things that don't work, but maybe that's just me.
The one thing missing here is a pledge to cut spending. While the capital gains cut would probably result in higher revenues in the short term (every capital gains tax cut in the past has produced exactly that), the other cuts will likely result in lower tax revenues. Not that I have a problem with that, but someday we will have to balance the budget and with the baby boomers retiring that day needs to be sooner rather than later.