Monday, November 29, 2010

Pence favors flat tax, return to traditional values

Last updated: November 29, 2010 2:23 p.m.
Sylvia A. Smith | Washington editor

WASHINGTON – The graduated income tax should be abandoned in favor of a flat tax for individuals and businesses, Rep. Mike Pence, R-6th, said Monday.

In a speech to the Detroit Economic Club, Pence also said he supports amending the Constitution to cap federal spending at 20 percent of gross domestic product except for wartime defense spending.

The Detroit Economic Club is considered a must-do venue for politicians hoping to elevate their profiles. Pence is one of several Republicans whose names are mentioned as contenders for the 2012 GOP presidential nomination, but he deflected a question about whether he intends to run. Pence is also thought to be considering a bid for Indiana governor.

Pence’s support for the flat tax echoes other conservative candidates for president in past years, and Pence has advocated it for many years.

In Pence’s version, everyone would pay the same rate on wages and business income after first deducting personal and dependent exemptions. Businesses would be allowed to deduct all the costs of operating a business. Savings and investments would not be taxed.

After doing the math, people and businesses would play a flat rate – generally suggested at 15 percent. There would be no exemptions for mortgages, charitable deductions or depreciation.

“The more you money you make, the more you pay,” Pence said. “It’s fair, simple and effective.”

In addition to the flat tax and constitutional amendment to cap federal spending, Pence said the country’s economic engine is best fueled by a reduced regulation, an “all-of-the-above” energy policy that includes nuclear power plants, more trade agreements and a more restricted mission for the Federal Reserve.

But he said none of that can be accomplished unless America renews a commitment to values that include honesty, integrity, dual-gender marriage and religion.

He said Americans are ready to return to “timeless ideals” and that “they await men and women who will lead us back to that future.”

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