Harvey Golub: Simple Tax Code Is Fair Tax Code

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Taxes

A flat tax is a fair tax, former chairman and CEO of American ExpressHarvey Golub said Monday on CNBC.com “The Kudlow Report.”

“People in Washington like to grant favors and withhold favors,” he said. “They like to raise money to run campaigns, and they would not raise as much money if things were simpler for people and corporations.”

Golub, who is chairman of Miller Buckfire and serves on the executive committee of the American Enterprise Institute, explained his four-pronged tax plan:

• Tax income only once.
• Eliminate preferences.
• Eliminate the estate tax.
• Eliminate corporate tax.

The latter, he argued, raises only about $11 billion annually. In recent years, it never raised more than $20 billion per year.

“But as a moral matter, all of that has been taxed already,” he said. “You eliminate the corporate tax and then you have capital gains and dividends paid at the normal rate. You would certainly raise more money than you are now.”

Golub wrote in a recent Wall Street Journal op-ed titled “A Simple Tax Code Is a Fair Tax Code”:

“To make sure taxes are paid only once and at a consistent rate no matter how individuals choose to spend their money, first eliminate deductions for state and local taxes and charitable and mortgage-interest payments and other preference items. Second, eliminate corporate taxes entirely and tax dividend income and capital gains at the same rate as salary or wages when received by individuals. And third, eliminate estate taxes since those earnings have already been taxed. Instead, receipts by heirs would be subject to tax when received by them.”

Golub also took the opportunity to criticize President Obama.

“What is missing is leadership,” he said. “The first task of a leader — any leader, any situation — is to define reality. We don’t see this president defining the current fiscal reality and the outlook for the economy for this country in a way that would persuade people that change was needed.”

Golub said he would like to see a president who understands “pro-growth policies.”

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“All of the things that the administration talks about with regard to pro-growth has been offset – more than offset – by anti-growth policies and actions,” he said. “If you give people $100 billion in reduction of one-year taxes on Social Security and Medicare, you get very little stimulus. If you reduce tax rates on a consistent basis over time, then people will change the decisions they make.”

He further offered a suggestion for the presumptive Republican presidential candidate.

“I would like to see Mitt Romney make a ringing case for free enterprise and for personal freedom, and the implications of that would manifest itself in our tax policy, regulatory policy and spending policy,” he said.

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