Tim Kaine on Tax Reform
Democratic Senate Challenger; previously Governor
Kaine promoted his compromise proposal of keeping the Bush tax cut levels for those who make less than $500,000 a year, and allowing them to expire for people with higher incomes. Kaine said doing so will add up to about half of the money needed to balance the budget, and help make it easier to find other targeted cuts to avoid the mandatory spending cuts. Kaine believes Allen's plan of not allowing the Bush tax cuts to expire for those who make $500,000 or more, will not work, and possibly add to the deficit.
KAINE: Well, everyone pays taxes; the statistics that have come out.
Q: I'm asking about federal income taxes.
KAINE: I would be open to a proposal that would have some minimum tax level for everyone.
ALLEN: It is typical of Tim Kaine. His record is one of always looking to raise taxes.
Kaine argued that he wasn't calling for a minimum across the board tax, but rather showing that he is open to any suggestions.
To pay for their plan, they'd slash middle-class tax breaks, raising taxes on the middle class. They'd turn Medicare into a voucher system. And rather than raise taxes on the wealthy by a single penny, they'd put thousands of defense jobs at risk. Let's be clear: That's not fiscally responsible. That's fiscally reckless.
We can't afford to try it again! We need to move forward, because while we've made progress, we still have a long way to go. We'll only get there if we elect leaders who put results ahead of ideology.
"The likes of President Obama?" Kaine responded.
"Well, the policies and agenda of President Obama, Nancy Pelosi, and Harry Reid," said
Kaine shed more light on his stance toward President Obama's deficit reduction plan, reiterating his support for letting tax cuts for the wealthiest Americans expire but opposing Obama's proposal to increase capital gains rates on some high-earning taxpayers: "Letting the Bush era tax cuts expire, even Grover Norquist has said, that's not a tax increase. The Bush tax cuts in the plan were made temporary for one reason: If you make them permanent, they will completely explode the deficit, so they're set to expire at the end of 2012, and I have supported the element of the president's plan that would let those tax cuts expire at the top end. That piece of the plan I support. "
However, I do propose one targeted tax increase. To avoid even deeper cuts that would mean denying health care services to some of our poor, elderly, and disabled, I propose a 30 cent per pack increase in our cigarette tax. This will bring Virginia's tobacco tax up to about half the national average. Virginia's current cigarette excise tax covers less than half the $400 million in Medicaid costs that smoking creates. I believe that the taxes on smoking should more closely match the budget costs that taxpayers incur because of smoking. Under my proposal, fewer of Virginians' tax dollars will be diverted to cover the costs of smoking.
The estate tax repeal will have a big fiscal impact--an estimated $250 million over two years. Running for governor in 2005, Kaine promised to try to repeal the tax. The General Assembly, meeting in a special session to consider transportation taxes, approved the proposal in August. Kaine signed it into law.
Small-business supporters and farmers, as well as the wealthy, sought the repeal. About 30 other states had repealed their estate taxes by the beginning of this year, while Virginia's estate tax rate remained at up to 16 percent. Some feared wealthy people would move to other states to avoid Virginia's taxes.
Let's provide meaningful tax relief for hundreds of thousands of Virginians by increasing the filing threshold for state income tax from $7,000 to $12,000 for an individual and from $14,000 to $24,000 for a married couple. With this change, we can eliminate income tax liability for an estimated 147,000 Virginians. And we can save approximately 176,000 more people from the hassle of having taxes deducted from their paychecks, only to file a tax return at year's end to receive a complete refund.
I have a proven record of cutting taxes. At the local and at the state level, I have fought to help families keep more of their hard-earned dollars, stimulating the economy and expanding opportunity for all Virginians.
Christian Coalition publishes a number of special voter educational materials including the Christian Coalition Voter Guides, which provide voters with critical information about where candidates stand on important faith and family issues. The Christian Coalition Voters Guide summarizes candidate stances on the following topic: "Increasing federal income tax rates"
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.
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