Gary Johnson on Tax Reform Former Republican NM Governor

FairTax would absolutely reboot the American economy

JOHNSON: Throwing out the entire federal tax system and replacing it with a consumption tax, the FairTax, which would absolutely reboot the American economy because it does away with the corporate tax to create tens of millions of jobs in this country.

Replace tax system with a FairTax

A: My next-door neighbor's dogs have created more shovel-ready jobs than this current administration. Balance the federal budget now, not 15 years from now, not 20 years from now, but now. And throw out the entire federal tax system, replace it with a FairTax, a consumption tax, that by all measurements is just that. It's fair. It does away with corporate income tax. [That would] create tens of millions of jobs in this country.

Replace job-killing tax code with FairTax

No national sales tax or VAT.

State tax policy is closely linked to federal policy. 36 states currently use either federal income or federal tax liability as the state tax base for personal income taxes. It is critical that Congress and the administration do not enact tax reform in a vacuum, but in consultation and in partnership with the nation’s Governors.
• National Sales or Value-Added Tax The nation’s Governors oppose a national sales or transactional value-added tax. Such taxes would intrude into a tax area that has traditionally been reserved for and relied on by state and local governments. If enacted, either of these taxes would seriously threaten the ability of state and local governments to maintain their tax base.
• Current Income Tax If Congress decides to reform the current tax system, they should reduce the complexity of current income taxes; increase incentives to work, save, and invest; and increase efficiency and fairness. As part of any reform of the current income tax, the nation’s Governors would oppose any modification to the deductibility of state income taxes, property taxes, and the interest on state and local bonds.
• Transition If major tax reform is enacted, it should not be implemented for at least three years, to give states ample time to adjust their own tax systems.
• Information Needs of the StatesThe ability of states to tax various revenue sources depends to a large extent on information that only the federal government can collect. This is becoming much more important given the complexity of both the international and domestic economies in tracing where goods and income are generated. It is critical that the federal government separate tax reform per se from the information that is collected from individuals, businesses, and corporations with respect to income generated. The data collection role of the federal government must be developed in partnership with state and local governments.