Ross Perot on Tax Reform 1992 & 1996 Reform Party Nominee for President

Increase taxes on the wealthy

Although critical of "trickle-down economics" and in favor of increased taxes on the wealthy, Perot as presidential candidate directed most of his criticism at the nation's political elite and never took on the corporations that were downsizing and shipping jobs overseas.

The rich should pay higher taxes

Take away the right of Congress to raise taxes

Consider a VAT value-added tax

One plan worth considering is a value-added tax (VAT), which collects a small percentage at each point in the manufacturing process. The VAT does not apply to sales outside the country. An advantage of this tax is that it is relatively easy to collect, and it encourages our exports, which means more jobs for the US. Another advantage of the VAT is that it taxes consumption rather than savings. There seems to be growing support for a consumption-based tax system. Presumably, a VAT would partially or substantially replace the income tax.

The disadvantage of the VAT is that it is regressive, but there are ways to compensate for that. The VAT should be closely analyzed in connection with any plan to reform our tax system.

Capital gains tax cut helps the rich; so cut investment tax

Capital gains is too lengthy a topic to get into very deeply in this book. However, I do have one suggestion. We should consider offering a special tax break for people who take a risk by investing their money in new businesses. If the money goes into the treasury of a start-up company to build that company, the investor ought to get a tax break for taking a substantial risk. If someone is just shooting dice on Wall Street, we shouldn't offer him or her a tax advantage to do it.

Cut spending and raise taxes to pay off debt

Perot does not advocate any substantial program cuts. His proposals primarily involve cost-cutting efficiency measures-the elimination of waste, the tightening of expansion, and the identification of spurious entitlement claims. His plans also rely heavily on increasing both the efficiency and capacity of the tax-gathering agencies in government. By strengthening the IRS, modernizing its computer capabilities, eliminating loopholes, and shoring up enforcement measures. He believes that much of the federal shortfall can be eliminated.

He admits that his big-government, big-business coalition would require additional tax revenues. Thus he would have a stronger and more efficient IRS.

Raise marginal tax rates on the wealthy

Disallow mortgage & health deductions for the rich

Another subsidy for the rich is the exemption from taxes on expensive employer-paid health insurance. These plans support the rich and encourage excessive health costs. They should be taxed as additional income.

Decrease capital gains tax to foster long-term thinking

The policies have already been proposed that can reverse our slide and get the economy moving for the long term:
• Investment tax credits. We can stimulate growth by providing tax credits to companies that buy productive equipment and machinery.
• Research and development tax credits. We need to encourage our companies to put their money into new improvements, new products, and new lines of products.
• Tax breaks for long-term capital gains. If shareholders aren’t squawking for a short-term gain, the company can concentrate on improving its product so it can survive, compete, and grow. We need a stair-stepped capital gains tax, decreasing each year over five years, on shares purchased from public companies with the money going into the treasury to build the company. This would provide the proper incentives to industry and to the market.