November 25th, 2007
09:47 AM ET
3 years ago

Thompson unveils tax plan

Fred Thompson unveiled his tax plan on Sunday.

(CNN)–GOP White House hopeful Fred Thompson released a seven point tax plan Sunday, that he says will encourage new economic growth, and move the country toward a reform of the federal tax code.

"The solutions to challenges in our economy are found in the homes and small businesses of ordinary Americans, not in the halls of Washington," Thompson said in a press release from his campaign. "My plan allows Americans to have greater control of their own money."

Among the ideas his plan calls for, Thompson would permanently extend the 2001 and 2003 tax cuts, signed into law by President Bush that are due to expire in 2010. He would also repeal the estate tax, and the Alternative Minimum Tax, while also reducing the corporate tax rate from 35 percent to no more than 27 percent, and permanently extending small business expensing.

In addition, Thompson's plan also calls for allowing a choice for American taxpayers by allowing them to decide whether they remain under the current tax code, or opting for a flat tax code. The flat tax plan would contain two tax rates: 10% for joint filers on income of up to $100,000 ($50,000 for singles) and 25% on income above those amounts.

Thompson, along with his other rivals for the GOP nomination, is scheduled to be in St. Petersburg, Florida on Wednesday night for the CNN/You Tube debate.

Click here to see CNN's new political portal: CNNPolitics.com

– CNN Political Desk Editor Jamie Crawford


Filed under: Fred Thompson • Race to '08
soundoff (34 Responses)
  1. Andrew, Haslett, MI

    I like choices, Fred, but reducing the tax on businesses just keeps the CEOs wealthy and the middle class in a struggle. It's a good idea but in practice, it's going to perpetuate a class system in America that has burdened middle class workers for years.

    Why don't you bring all those troops home in foreign countries where there are no wars like Korea and Europe. Close those bases and save tons of money, then we won't need the taxes on the middle class? Answer: because you have to keep the fear of war alive to fund those who contribute to campaigns and the military contractors in business. No way, Fred.

    Vote Ron Paul and vote for freedom

    November 25, 2007 11:39 am at 11:39 am |
  2. Lorenz, Queens, NY

    Just give up Thompson

    November 25, 2007 11:47 am at 11:47 am |
  3. Jeremiah, Odessa, TX

    Sounds great at first glance

    November 25, 2007 11:53 am at 11:53 am |
  4. MS Johnson City, TN

    Senator,

    How many bills related to tax relief did you introduce when you were in the Senate?

    As a lobbyist, did you ever lobby for any worthwhile tax relief?

    November 25, 2007 11:54 am at 11:54 am |
  5. MIke, Dover, DE

    Lorenz from NY,

    Any response to the article and the statistics in it? Any response to the numbers? Any intelligent response as to why it's good or bad?

    All i see there is a blunt anti-Thompson post with no response to the point of the article.

    I like the concept of a flat tax. The only way I think it will work is to stop or reduce government give me programs. But It's a good concept. I'll have to read up more on the details of it....

    November 25, 2007 12:45 pm at 12:45 pm |
  6. TRM

    I wish Fred would give the FairTax another look, but this sounds better than anything the socialist(D) have planned.

    http://democratequalssocialist.wordpress.com/

    November 25, 2007 12:49 pm at 12:49 pm |
  7. Daniel, NY

    A new poll from New Mexico just released has the state leaning Democratic, though McCain and Giuliani would both run competitive races.

    November 25, 2007 12:52 pm at 12:52 pm |
  8. Bill , Covington,LA

    I'm with thompson,unfortunately we are overwhelemed by those like hilary who would adhere to the doctrine of "to each according to his needs, from each according to his ability"
    Socialists one and all....enjoy. and once you have achieved it, you will long for democracy.

    November 25, 2007 12:55 pm at 12:55 pm |
  9. L. Stiles, Athens, GA

    Vodoo economics again. Go back to acting, Fred.

    November 25, 2007 01:33 pm at 1:33 pm |
  10. Toni,San Antonio

    we all like the sound of taxbreaks but we can't afford it. This is more washington irresponsibility. Paying taxes is a responsibility and yes we have to pay for our government. This one is too much like Bush and not smart enough to be president. More of the same old,same old. I am hoping for a good independant candidate such as a ticket of sherrod brown/jim web. Other wise it will be back to choosing the lesser of two evils

    November 25, 2007 01:39 pm at 1:39 pm |
  11. Greg, Houston Texas

    And how is he going to pay for all this?
    The devil is in the details. 1) The flat tax proposals I have seen only tax earned income. This would benefit the rich because investment income would not be taxable. 2) Repeal the estate tax would only benefit the rich. The current estate tax only applies to estates over two million. Besides a simple estate plan with an insurance policy to cover the taxes is the easiest solution and the premiums are tax deductible. 3) how about restructuring Bush's tax cuts from 2001 and 2003 to provide brakes to middle income folks. This is typical Repppublican smoke and mirrors.

    November 25, 2007 01:41 pm at 1:41 pm |
  12. Jabajax, Fort Lauderdale, FL

    So now the Ron Paul people are against reducing taxes? Just as I suspected. Ron Paul's support is from liberal Dems who just want the GOP to nominate a weak anti-war candidate. If you really agreed with Paul, you'd be for reducing taxes.
    It was Ronald Reagan who said he never met a tax he didn't want to reduce. Libertarians who envy and dislike the wealthy? I don't believe that. Ron, you have strange bed-fellows. Wake up.

    November 25, 2007 02:41 pm at 2:41 pm |
  13. A Voice For Reason

    So Fred, how are you going to pay for the trillions of dollars of debt a Republican administration has piled on American taxpayers? Just another pathetic politician with his head buried into the sand.

    November 25, 2007 03:50 pm at 3:50 pm |
  14. heartlight 3, Maui, HI

    I am an accountant, and I have never been able to understand how all these Republicans calculate that reducing the revenue stream by large amounts is not going to result in not having enough money to run the company, er, country. Bush's tax cuts reduced the revenue stream at a time when more revenue is needed to finance the war. This has resulted in putting the war on the credit card. How do they think they're ever going to pay off the debt? (Or even pay it down?) This plan that Thompson has presented sounds like it will reduce the revenue stream even further. Who is telling these people that this can possibly work? Most people who run companies understand that the best way to make a profit is by increasing the revenue stream and reducing expenses. Trying to do it by reducing expenses alone has not worked all that well. From what I am seeing in this country it looks like expenses are being reduced to the extent that you can't run the country effectively. I am a lowly bookkeeper, but even I can see that this is not a sustainable practice. I guess I am not surprised that Bush bankrupted the companies he ran, if this is how he operates. Please, people, let's not get caught up in the rhetoric and lose sight of common sense.

    November 25, 2007 03:53 pm at 3:53 pm |
  15. Chris, Pensacola FL

    Let's just do away with taxation period. We'd have more money to donate and give. We'd have more to bless others.

    I like Ron Pauls idea of doing away with the IRS. We didn't need these organizations all throughout our countries history until this past half century. That's very strange. I'm willing to be we don't need them at all.

    November 25, 2007 03:58 pm at 3:58 pm |
  16. Daniel, Chicago

    I would like to see what Sen. Thompson plans on cutting from the budget to compensate for these enormous tax cuts. I'm pretty sure he would have to eliminate every government program besides Social Security, Medicare, and the military to pay for this.

    November 25, 2007 04:25 pm at 4:25 pm |
  17. Marcus, Ron, MI

    Yet another freeluncher GOP candidate...

    We'll cut taxes no matter what. Who cares about the deficit? We won't pay it anyway. Your children will...

    This is sad... really. The GOP has been taken by radicals who have decided to raid the US Treasury and it's ok...

    November 25, 2007 04:58 pm at 4:58 pm |
  18. Beckster

    Andrew,

    I want you to think about something for a second. As a CEO myself, do you think by increasing my taxes and lowering my profit (as you suggest doing) that my income will suffer and the other classes will have more money?

    I hope not. Because like all of the other greedy and wealthy CEO's out there, when you raise taxes on me, I turn around and raise my prices. And in some cases have to lay off the employees who work for me. So who do you think a tax increase hurts more now, me or the other classes?

    Use your head and quit spouting off illogical liberal talking points. True economic growth occurs when CEO's of companies prosper and provide jobs and spend a ton of their money on other people's stuff too.

    November 25, 2007 05:00 pm at 5:00 pm |
  19. KEITH JAMES LOUTTIT

    "The solutions to challenges in our economy are found in the homes and small businesses of ordinary Americans, not in the halls of Washington," Thompson said in a press release from his campaign.

    Well this coming from someone who walks the Halls of Washington...

    BUT: I see he has an idea worth debating. What does Hillary or Barack think now? Or will they have to wait until Edwards makes his statement before they can amble to a point?

    November 25, 2007 05:17 pm at 5:17 pm |
  20. Jack, Fort Myers, FL

    Well...the corporate money should start rolling in now? Hey...what kind of breaks are those of us with two people working and still barely able to hit $55.000 per year? No breaks...don't have an estate....no stocks/bonds...just BS...and everincreasing taxes. And by the way...why should I pay the same traffic fines as someone making 50 times what I do? Same old junk–make it easier for companies to do business so they can export all non-coporate jobs to low wage nations. Then..reinvest their extraordinary profits into Subway;s and Starbucks to create a "new job in America."

    November 25, 2007 05:28 pm at 5:28 pm |
  21. Ryan, Provo, UT

    I love how CNN always uses this picture of Fred where he has this expression that seems to say, "What the hell, I might as well throw this out there."

    November 25, 2007 05:35 pm at 5:35 pm |
  22. Stephan, Pittsburgh, PA

    The first Commenter said: but reducing the tax on businesses just keeps the CEOs wealthy and the middle class in a struggle.

    One idea behind reducing corporate taxes is motivated by the desire to get them to pay any taxes at all, which most don't (with other effects of reducing the relative profitability of offshoring, and increasing the overall stimulation of growth).

    At 35%, it's cheaper for most corporations to pay millions of dollars per annum to accounting firms in order to show a loss (and pay nothing in terms of taxes). Likewise, it often costs the IRS more to do a corporate audit than is recovered by said audit, reducing the risk of the deception's discovery.

    At some lower level (not sure if 27% is low enough) it becomes less costly (in combined money and risk) to pay the taxes instead of the accountants, which allows for greater federal revenue (and hopefully more tax cuts for the individual).

    Some aspects of your comment tell me that you are new to libertarian ideas or the Republican party or both. I welcome you and want to give you a few tips:

    1. While I, myself, am undecided, Fred, unlike Giuliani or Huckabee (for unrelated reasons), is not the enemy of libertarian or classically liberal ideas. Other than Paul, he's one of the most libertarian candidates to have a shot at the Republican ticket since Reagan (and Goldwater before him).

    2. The "orthodox" libertarian response to any proposal about corporate anything is not that CEOs make too much, but that the Corporation is a figment of the State's imagination, as are all limited liability partnerships, nonprofits, etc. The only function of such priva legis entitees is in the subversion of the market (stacking the deck against smaller, non-incorporated businesses). That's why CEO's are so rich–they operate with an unfair business advantage conferred by the State (not to mention that arrangement encourages the hiring of government influence peddlers as CEOs, which, in turn, encourages State/business collusion on things like contracts and taxes, but I'm getting off topic).

    All of the previous paragraph is close to inarguable in it's truth, but somewhat fanciful and Quixotic in the notion that this can change.

    allowing them to decide whether they remain under the current tax code, or opting for a flat tax code.

    Personally, I find an optional 2-tiered flat tax to be a great idea, if the macroeconomic numbers add up.

    November 25, 2007 06:55 pm at 6:55 pm |
  23. Stephan, Pittsburgh, PA

    It's a good idea but in practice, it's going to perpetuate a class system in America that has burdened middle class workers for years.

    Oh, and libertarians don't particularly concern themselves with "classes" (with the notable exception of economic proposals that encourage socio-economic striation at the expense of the market's "creative destruction"–"creative destruction" being otherwised defined as the "American dream" model, in which enough sweat and ingenuity can make a "nothing" almost infinitely wealthy if he or she chooses to be) and almost always refuse Marx's notions of "class warfare."

    Marx's framing of economics and history and, say, that of Murray Rothbard's (or Hayek's or Milton Friedman's or Ludwig Von Mises's) are both incompatible and antithetical.

    November 25, 2007 07:16 pm at 7:16 pm |
  24. Andrew, Haslett, MI

    I am a Ron Paul supporter, and I support reducing taxes where it is needed, not for big corporations which can afford to pay more taxes because of all the tax breaks they get now. Ron Paul wants to eliminate the income tax, not all business taxes. Ron Paul wants to save money and cut waste where it costs the most, in a defense budget which maintains our empire overseas in over 130 countries. That is the biggest source of tax relief there is. However, guys like Fred Thompson want to fund big business by giving them tax incentives in order to bring supposed tax relief to the middle class. Haven't we seen over and over again that this NEVER works? I'd be glad for an extension of the Bush tax cuts and for repealing the estate tax and the AMT, but replacing it with an invisible tax on consumers because corporations have to pay more and will pass along the costs isn't the answer.

    Ron Paul 2008

    November 25, 2007 08:16 pm at 8:16 pm |
  25. Joshua

    I like the flat tax idea, much better than that unFairTax bulls***. But how can he cut taxes and balance the budget. Oh yeah I forgot, he's going to leave the Nation's children with a reverse inheritance – instead of getting money we pay for his mistakes.

    November 25, 2007 08:34 pm at 8:34 pm |
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