GOP Senate candidates Perdue, Kingston talk taxes
The Associated Press sat down recently with the two Republicans competing for Georgia’s open Senate seat to discuss three key issues. Rep. Jack Kingston of Savannah and former Dollar General CEO David Perdue will meet in a runoff July 22, and the winner will face Democrat Michelle Nunn in the fall. Below is a discussion on tax reform and how to tackle the nation’s $17.5 trillion debt. Candidate remarks have been edited in some places for length.
Do you believe the United States can substantially reduce its debt by only cutting spending and not seeking additional sources of revenue, and what sort of additional revenues might be possible?
KINGSTON: I believe we have a spending problem, not a taxing problem, that we have to rein in spending. There is a lot of duplications. For example, there are 47 different federal job training programs. And that would mean 47 managers, 47 locations, 47 desks, 47 sets of telephones and policies and letterheads. We actually have passed in the House a bill that consolidates those and reduces it down. And maybe you don’t need (just) one but you don’t need 47 federal job training programs. ... Number two, the waste of the programs. There is a 16 percent error rate in school lunch and 25 percent in school breakfast. Surely, Democrats and Republicans could agree on let’s go after that kind of documented waste that the inspectors general have pointed out.
PERDUE: First of all, I don’t believe the answer to our problem is increasing taxes. That just can’t happen. We’ve proven that time and time again. Nor do I believe that we can solve this debt crisis just by cutting spending. ... To solve the debt crisis, we have to cut spending, but we also have to get the economy going and that increases revenue without increasing taxes. We have over $2 trillion sitting offshore in foreign banks. These are U.S. profits trapped overseas because of our tax laws. We are the only developed country that has a repatriation tax law on foreign profits, and those monies inadvertently get invested over there. I think you can get bipartisan support for changing that one part of the tax code, I really do. I think that’s a short-term, that can be done right now. And those dollars would come flying, I believe, back into the economy and be invested in creating capital investment and jobs.
Do you believe the House and Senate should take a closer look at tax breaks, specifically corporate tax expenditures, and would you be willing to eliminate some of these tax breaks even though that would result in an effective tax increase on those businesses?
KINGSTON: Again, I don’t believe we have a revenue problem as much as we have a spending problem, so I would not want to have tax reform designed to increase the revenues. But we need tax simplification. We need a tax code that stimulates business growth. We need one that is simple to comply with, and one that is transparent so that you are not spending thousands of dollars to a CPA or an accountant to fill out your tax return. I support the fair tax, and I am endorsed by fair tax author John Linder and fair tax champion Congressman Rob Woodall. But I’m also supported by flat tax champion Steve Forbes. The last statistic I saw, and I’m always a little nervous quoting statistics, so I’m going to couch this by saying the last statistic I saw was that we spend 6 billion man-hours a year complying with the tax code. That’s time that could be better spent inventing a better mouse trap, curing some horrible disease or investing frankly in a plant expansion that would create more jobs. So we need, in order to compete in the international marketplace, a simpler tax system.
PERDUE: No, I wouldn’t and the reason why is that, again, we already have a tremendous disadvantage. These are job creators, these are people that reinvest capital, they reinvest properties, they create jobs. And we have them already at a tremendous disadvantage against foreign competitors. Let me give you an example, our 35 percent corporate tax rate on manufacturing in the United States is competing with someone let’s say in Malaysia at a 16 or 17 percent corporate tax rate. ... What we’ve had is 100 years of Congress and various administrations using taxes to direct activity, and how people operate. I believe that has put us at a tremendous disadvantage. There are deductions and things in the code that run counter to each other. It’s a very confusing and expensive burden on not only businesses but individuals. I have become a student of the fair tax, and I think it absolutely would level the playing field with foreign competitors and bring some manufacturing jobs back to the U.S. So I have become not only a supporter of that, but a proponent of that. So you say, how do you get the economy going again? It’s a very broad answer. But the number one thing to do to solve the debt crisis is to get the economy going again like we did in the 80s.
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