In our previous Updates we published Ron Paul’s views on various topics from Crime, Drugs, , Education, the Economy, Energy and Immigration. In this update we will continue with Paul’s views on : 

Ron Paul on Tax Reform 

Doesn’t want flat tax or consumption tax

Q: If you replace the income tax with a flat tax, a 30% consumption tax, that would be very, very punishing to the poor and middle class.

A: Well, I know. That’s why I don’t want it.

Q: So you have nothing?

A: I want to cut spending. I want to use the Constitution as our guide, and you wouldn’t need the income tax.

Get rid of IRS; get rid of income tax; get rid of spending

Q: You have been saying on the campaign stump, "I’d like to get rid of the IRS. I want to get rid of the income tax." Abolish it? A: That’s a good idea. I like that idea.

Q: What would happen to all those lost revenues? How would we fund our government?

A: We have to cut spending. You can’t get rid of the income tax if you don’t get rid of some spending. But, you know, if you got rid of the income tax today you’d have about as much revenue as we had 10 years ago, and the size of government wasn’t all that bad 10 years ago. There’re sources of revenues other than the income tax. You have tariff, excise taxes, user fees, highway fees. So, so there’s still a lot of money. But the real problem is spending. But, you know, we lived a long time in this country without an income tax. Up until 1913 we didn’t have it.

Q: But if you eliminate the income tax, do you know how much lost revenue that would be?

A: A lot.

Q: Over a trillion dollars.

A: That’s good.

I have never voted for a tax increase; and never will

Q: Would you promise to the people watching this right now, that you will oppose and veto any efforts to raise taxes as long as you’re president?

A: I have never voted for a tax increase; never will. But the tax issue is only one-half of it. You can easily pledge not to raise taxes, but you have to cut spending.

Immediately work to phase out the IRS

Q: If you were president, would you work to phase out the IRS?

A: Immediately. You can only do that if you change our ideas about what the role of government ought to be. If you think that government has to take care of us, from cradle to grave, & if you think our government should police the world and spend hundreds of billions of dollars on a foreign policy that we cannot manage, you can’t get rid of the IRS. But if you want to lower taxes and stop causing all the inflation, you have to change policy.

READ MORE ON RON PAUL’S VIEWS ON TAX REFORM

Get rid of the inflation tax with sound money

Q: Name a tax you’d like to cut.

A: I would get rid of the inflation tax. It’s a tax that nobody talks about. We live way beyond our means. We print money for it. The value of the money goes down, and poor people pay higher prices. That is a tax. That’s a transfer of wealth from the poor and the middle class to Wall Street. Wall Street’s doing quite well, but the inflation tax is eating away at the middle class of this country. We need to get rid of the inflation tax with sound money.

Campaign slogan in 2004: The Taxpayers’ Best Friend

He supports the abolition of the income tax, most Cabinet departments, and the Federal Reserve. He also endorses a non-interventionist foreign policy and defederalization of the healthcare system. He has voted against amending the US Constitution to ban same-sex marriage and also against an amendment to prohibit flag-burning. Paul’s campaign slogan for 2004 was "The Taxpayers’ Best Friend!," and he has earned praise from the National Taxpayers Union and the National Federation of Independent Busines

Voted YES on retaining reduced taxes on capital gains & dividends

Vote to reduce federal spending by $56.1 billion over five years by retaining a reduced tax rate on capital gains and dividends, as well as.

• Decreasing the number of people that will be required to pay the Alternative Minimum Tax (AMT)
• Allowing for deductions of state and local general sales taxes through 2007 instead of 2006
• Lengthening tax credits for research expenses
• Increasing the age limit for eligibility for food stamp recipients from 25 to 35 years
• Continuing reduced tax rates of 15% and 5% on capital gains and dividends through 2010
• Extending through 2007 the expense allowances for environmental remediation costs (the cost of cleanup of sites where petroleum products have been released or disposed)

Voted YES on providing tax relief and simplification

• Extension of Family Tax Provisions
• Repeals the scheduled reduction (15 to 10 percent) for taxable years beginning before January 1, 2005, of the refundability of the child tax credit.
• Extends through 2005 the increased exemption from the alternative minimum tax for individual taxpayers.
• Extends through 2005 the following expiring tax provisions:
  1. the tax credit for increasing research activities;
  2. the work opportunity tax credit;
  3. the welfare-to-work tax credit;
  4. the authority for issuance of qualified zone academy bonds;
  5. the charitable deduction for donations by corporations of computer technology and equipment used for educational purposes;
  6. the tax deduction for certain expenses of elementary and secondary school teachers;
  7. the expensing of environmental remediation costs;
  8. the designation of a District of Columbia enterprise zone

Voted YES on making permanent an increase in the child tax credit

Vote to pass a bill that would permanently extend the $1,000 per child tax credit that is scheduled to revert to $700 per child in 2005. It would raise the amount of income a taxpayer may earn before the credit begins to phase out from $75,000 to $125,000 for single individuals and from $110,000 to $250,000 for married couples. It also would permit military personnel to include combat pay in their gross earnings in order to calculate eligibility for the child tax credit.

Voted YES on permanently eliminating the marriage penalty

Vote to pass a bill that would permanently extend tax provisions eliminating the so-called marriage penalty. The bill would make the standard deduction for married couples double that of single taxpayers. It would also increase the upper limit of the 15 percent tax bracket for married couples to twice that of singles. It also would make permanent higher income limits for married couples eligible to receive the refundable earned-income tax credit.

Voted YES on making the Bush tax cuts permanent

Vote to pass a bill that would permanently extend the cuts in last year’s $1.35 trillion tax reduction package, many of which are set to expire in 2010. It would extend relief of the marriage penalty, reductions in income tax rates, doubling of the child tax credit, elimination of the estate tax, and the expansion of pension and education provisions. The bill also would revise a variety of Internal Revenue Service tax provisions, including interest, and penalty collection provisions. The penalties would change for the failure to pay estimated taxes; waive minor, first-time error penalties; exclude interest on unintentional overpayments from taxable income; and allow the IRS greater discretion in the disciplining of employees who have violated policies.

Voted YES on $99 B economic stimulus: capital gains & income tax cuts

Vote to pass a bill that would grant $99.5 billion in federal tax cuts in fiscal 2002, for businesses and individuals.

The bill would allow more individuals to receive immediate $300 refunds, and lower the capital gains tax rate from 20% to 18%.

Voted YES on Tax cut package of $958 B over 10 years

Vote to pass a bill that would cut all income tax rates and make other tax cuts of $958.2 billion over 10 years. The bill would convert the five existing tax rate brackets, which range from 15 to 39.6 percent, to a system of four brackets with rates of 10 to 33 percent.

Voted YES on eliminating the Estate Tax ("death tax")

Vote to pass a bill that would gradually reduce revenue by $185.5 billion over 10 years with a repeal of the estate tax by 2011.

Voted YES on eliminating the "marriage penalty"

Vote on a bill that would reduce taxes for married couple by approximately $195 billion over 10 years by removing provisions that make taxes for married couples higher than those for two single people. The bill is identical to HR 6 that was passed by the House in February, 2000.

Voted YES on $46 billion in tax cuts for small business

Provide an estimated $46 billion in tax cuts over five years. Raise the minimum wage by $1 an hour over two years. Reduce estate and gift taxes, grant a full deduction on health insurance for self-employed individuals, increase the deductible percentage of business meal expenses to 60 percent in 2002, and designate 15 renewal communities in urban rural areas.

Overhaul income tax; end capital gains & inheritance tax

Paul adopted the Republican Liberty Caucus Position Statement:

As adopted by the General Membership of the Republican Liberty Caucus at its Biannual Meeting held December 8, 2000.

• WHEREAS libertarian Republicans believe in limited government, individual freedom and personal responsibility;
• WHEREAS we believe that government has no money nor power not derived from the consent of the people;
• WHEREAS we believe that people have the right to keep the fruits of their labor; and
• WHEREAS we believe in upholding the US Constitution as the supreme law of the land;

BE IT RESOLVED that the Republican Liberty Caucus endorses the following [among its] principles:

1. The tax system of the United States should be overhauled.
2. There should be a national debate discussing various alternative means of taxation including but not limited to a single flat income tax, repealing the income tax and replacing it with a national sales tax, and reducing spending to the point where the income tax can be repealed without the need to replace it with a national sales tax or any other form of taxation.
3. The capital gains tax should be *eliminated*.
4. The inheritance tax should be *eliminated*.
5. The new tax system should be implemented *promptly*.

Phaseout the death tax

Paul sponsored the Death Tax Elimination Act:

Title: To amend the Internal Revenue Code of 1986 to phaseout the estate and gift taxes over a 10-year period.

Summary: Repeals, effective January 1, 2011, current provisions relating to the basis of property acquired from a decedent. Provides with respect to property acquired from a decedent dying on January 1, 2011, or later that:

1. property shall be treated as transferred by gift; and
2. the basis of the person acquiring the property shall be the lesser of the adjusted basis of the decedent or the fair market value of the property at the date of the decedent’s death.
3. Requires specified information to be reported concerning non-cash assets over $1.3 million transferred at death and certain gifts exceeding $25,000.
4. Makes the exclusion of gain on the sale of a principal residence available to heirs.
5. Revises current provisions concerning the transfer of farm real to provide that gain on such exchange shall be recognized to the estate only to the extent that the fair market value of such property exceeds such value on the date of death.
6. Provides a similar rule for certain trusts.
7. Amends the special rules for allocation of the generation-skipping tax (GST) exemption to provide that if any individual makes an indirect skip during such individual’s lifetime, any unused portion of such individual’s GST exemption shall be allocated to the property transferred to the extent necessary to make the inclusion ratio for such property zero; and
8. if the amount of the indirect skip exceeds such unused portion, the entire unused portion shall be allocated to the property transferred.
9. Provides that, if an allocation of the GST exemption to any transfers of property is deemed to have been made at the close of an estate tax inclusion period, the value of the property shall be its value at such time.

Rated 89% by NTU, indicating a "Taxpayer’s Friend" on tax votes

Paul scores 89% by NTU on tax-lowering policies

Every year National Taxpayers Union (NTU) rates U.S. Representatives and Senators on their actual votes—every vote that significantly affects taxes, spending, debt, and regulatory burdens on consumers and taxpayers. NTU assigned weights to the votes, reflecting the importance of each vote’s effect. NTU has no partisan axe to grind. All Members of Congress are treated the same regardless of political affiliation. Our only constituency is the overburdened American taxpayer. Grades are given impartially, based on the Taxpayer Score. The Taxpayer Score measures the strength of support for reducing spending and regulation and opposing higher taxes. In general, a higher score is better because it means a Member of Congress voted to lessen or limit the burden on taxpayers. The Taxpayer Score can range between zero and 100. We do not expect anyone to score a 100, nor has any legislator ever scored a perfect 100 in the multi-year history of the comprehensive NTU scoring system. A high score does not mean that the Member of Congress was opposed to all spending or all programs. High-scoring Members have indicated that they would vote for many programs if the amount of spending were lower. A Member who wants to increase spending on some programs can achieve a high score if he or she votes for offsetting cuts in other programs. A zero score would indicate that the Member of Congress approved every spending proposal and opposed every pro-taxpayer reform.