Tim Pawlenty on Tax Reform Republican MN Governor

Bush tax cuts should have been permanent in the first place

A: Senator Obama is for dramatically increasing taxes. And Senator McCain doesn't believe that's the way to grow the economy. Obama's proposals include lifting the cap on Social Security taxes, in terms of income levels; not addressing the AMT very fully. He wants to boost capital gains taxes from 15% to almost double that.

Q: You don't have a problem with allowing the Bush tax cuts that were implemented in 2001 and 2003 being made permanent, all of the Bush tax cuts, the estate tax plus the tax cuts for the wealthiest Americans, including billionaires?

A: They should have been permanent in the first place. The fact that we're even having the debate, I think, is silly. But now that they're going to expire, I think they should continue.

Bush tax cuts should have permanent in the first place

A: They should have been permanent in the first place. The fact that we're even having the debate, I think, is silly. But now that they're going to expire, I think they should continue. And keep in mind, when you talk about tax cuts for the wealthy, that involves these reductions in corporate taxes, or increasing the AMT, or the exemptions I had talked about. And when you look at as a basket, it's the kind of thing we need to do to grow jobs, expand the economy. We can't tax our way out of this. We're going to have to grow our way, in part, out of it.

Supports Single Sales Tax Reform

• Opposed tax increases that would have stunted job growth in Minnesota.
• Proposed and signed Single Sales Tax Reform, a fairer tax formula that encourages employers to make investments in Minnesota.

$12B in federal economic stimulus as state block grants.

The nation's governors urge you to include state countercyclical funding as part of your legislation to stimulate the economy. This would include $6 billion in Medicaid assistance by freezing scheduled federal FMAP reductions and increasing all states' F Congress approved $20 billion in assistance to states, including $10 billion in Medicaid and $10 billion in block grants. The governors' current stimulus proposal is essentially the same, with the exception that it is a total of $12 billion as opposed to $20 billion. This proposal can be enacted quickly, as there is precedent and it is timely, temporary and targeted.

Additionally, governors appreciate federal efforts to use tax policy to get additional money into the hands of consumers and businesses to stimulate the economy. When considering tax changes to spur economic growth, governors urge Congress and the Administration to follow the maxim of "Do no harm" by avoiding changes at the federal level that would diminish state tax revenues or force state actions that would undermine the effectiveness of federal efforts.

We look forward to working with you to enact the appropriate stimulus program.