Tony Knowles on Tax Reform Democratic Challenger for Senate (AK; previously served as Governor)

Oppose the $143 billion corporate tax bill as a tax giveaway

KNOWLES: Knowles said the gas line provisions were noncontroversial and were merely "parked" on the bill because it would become law. "That doesn't address the merits of the jobs bill," Knowles said. "It's a $143 billion tax giveaway. That is a bill that, yes, I would not have supported."

Offer a tax credit for the industry to build a gas pipeline

MURKOWSKI: "We got over $700 million worth of tax credits to whoever is going to build this line. If you don't think that's an incentive that gets people to look at the project, you need to look again." Another provision offers an 80 percent loan guarantee from the federal government. Other language streamlines permitting and judicial reviews. "We made it happen and it's news that all Alaskans should be celebrating," she said. "It's real results; it's not just talking about it."

Support permanent tax cuts for most wage earners

KNOWLES: The best way to fix our budget problems is to create jobs. I support permanent tax cuts for most wage earners but would roll back cuts for the top 1% who average $1 million a year or more. This would generate $194.5 billion that should be invested in infrastructure, health care for seniors, children and veterans, and education.

MURKOWSKI: Federal tax cuts are a means to spur economic growth. I firmly believe individuals know how to better spend their money than the government does. This means more private investment instead of inefficient government-run programs. In the long run, that leads to greater prosperity and a reduced deficit for the nation as a whole.

Support tax cuts for lower and middle-class

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.

Let states independently determine estate taxes.

We are writing to request equal treatment between states and the federal government on estate tax changes. Regardless of one’s view about phasing out the federal estate tax, the Governors are absolutely united in opposing any action that would discriminate against states in the phase-out of the state and federal estate taxes. This issue needs to be addressed before the Senate goes to conference with the House.

Governors believe that the ability of states to independently determine their own tax revenue policy is a basic tenet of federalism. Moreover, no federal tax bill should be enacted without close consultation with the states.

At the very least, there must be equity in the treatment of the state death tax credit in the tax bill the Congress considers with the proposed phase-out of the federal estate tax. Governors oppose provisions that impose disproportionate impacts on state revenue systems. The changes proposed by the Senate would have abrupt, significant adverse impacts on state revenues at a particularly onerous time for many states. The potential impact on states would begin next year and have a potential impact of between $50 and $100 billion over the next ten years.

We urge the leaders to respect those rights and to restore fairness.