Rick Santorum on Corporations
Republican Jr Senator (PA); 2012 presidential frontrunner
SANTORUM: Absolutely. I'm a capitalist, not a corporatist. I'm not someone who believes we should be bailing out corporations whether their auto industries, or banks. The auto industry would have survived through a bankruptcy process, instead of Washington picking a winner and a loser. And, in this case, the losers are the bondholders, and the winners were the unions. That's fine. They did it, the unions survived. We have not survived in continuing to grow manufacturing jobs. We have a president, and an economy right now, that is choking our ability to be able to compete.
Santorum received huge applause for decrying the Common Core and touting his last go-around in Iowa. But when he called on his party to become "pro-worker," response ranged from reluctant applause to silence.
After 30 years of this policy, does it really work? The short answer is "Yes, but." The "yes" part is pretty clear. Investors can earn more profit ("the rising ride" part), businesses will grow, & there will be more jobs at higher wages ("lifting all boats").
But the income gap is widening, and [non-college grads] are working part-time or in jobs that provide little prospect for advancement. The tide is rising, but many boats have holes of various sizes--for example, a lack of skills or experience, an unstable family, or no high school degree.
Democrats are fond of saying that all the Republican talk about a "rising tide" really amounts to "trickle-down economics." We have to admit that for the people at the bottom, that's what if feels like these days--just a trickle.
The regulations weren't perfect-they were burdensome, costly, and in many areas ineffective-but the attention curbed some of the outrageous abuses when directors were publicly reminded that their duty is to shareholders.
Nevertheless, the culture of many companies still encourages a short-term outlook and disproportionate rewards for executives at the expense of shareholders and workers. Business leaders are more richly rewarded in America than in almost any other country, and it's hard to believe that THAT many of them are THAT good,
SANTORUM: No, it's not. What we do is cut corporate taxes for everybody. We cut it from 35% to 17.5%, make it basically a net profits tax. So part of what we are trying to do is to have a government system that can compete with who our competitor is. The competitor at the local drugstore is not China. The competitor is other people. And as long as that is level and everybody's paying, the big corporations and the little ones--and that's why we have a flat 17.5%--so we keep the little guys paying the same rate as the big guys who right now, with this very complex code, a lot of folks in there trying to reduce rates by using the tax code to shrink their tax liability. So we've leveled the playing field for the guys here in this country and we've created a competitive environment for the manufacturer.
SANTORUM: I come from southwestern Pennsylvania, the heart of the steel country, the heart of manufacturing. And it's been devastated because we are uncompetitive. Thirty years ago we were devastated because business and labor didn't understand global competitiveness and they made a lot of mistakes. They weren't prepared for it and we lost a lot of jobs. That's not what's happening now. Our productivity gains, our labor force, they're doing their job, they're being competitive. But they're running into a stiff headwind called government. And it's government taxation, 35% corporate tax which is high--the highest in the world. It's a tax that doesn't easily offset when we try to export.
Q: Everyone on this stage is for lowering the corporate tax.
SANTORUM: No one wants to zero it out for manufacturers and processors, which is what I do because we are at 20% cost differential with our nine top trading partners on average.
That's why my plan takes the corporate tax, which is 35%, cuts it to zero, and says, if you manufacture in America, you aren't going to pay any taxes. We want you to come back here.
We cut the corporate tax from 35% to zero, because we want to build the great middle of America again, get those jobs that were shipped overseas by companies that were looking too make a profit because they couldn't any longer do it here, and bring those jobs back to America.
We cut that corporate rate to zero. We pass repatriation to get those resources that are overseas, $1.2 trillion, and we bring them back here.
We'll create jobs, and I'll get Democratic votes to pass it. We'll bring things together, because those industrial state Democrats--and I know, because I'm from an industrial state--they will vote for this bill. You want to get something going, elect someone who knows how to get things done.
PAWLENTY: Well, the US needs a growth target, and it needs to be an aggressive and bold growth target.
Q: Gov. Pawlenty says America can quickly grow 5% a year. Is he right?
SANTORUM: America has unbounded potential. And I think putting a limit on that potential, we've grown at faster rates than that. When I grew up, 21% worked in manufacturing. It is now 9%. If you want to know where the middle of America went, it went to China, it went to Malaysia, it went to Indonesia We need to bring it back. I put together a four-point plan to do it. The big thing I proposed is to take the corporate rate which makes us uncompetitive, particularly in exporting goods, take the corporate rate and cut it to zero for manufacturers.
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