Giuliani's Tax Cut Proposal: A Legacy Worth Preserving 

Congress Should Enact Rudy's Brilliant Tax Reduction Plan, and the Remaining Presidential Candidates Should Adopt It

Former New York City Mayor Rudy Giuliani, who became an American hero on 9/11 and regularly led the race for Republican nominee for President, withdrew from the race this week after Florida failed to resuscitate his candidacy. 

The most frequent discussion topic among political pundits and the chattering class has predictably been Rudy's failed gamble in bypassing the early caucuses and primaries.  There is another legacy of his candidacy, however, that should instead stand foremost in the minds of American voters and the Presidential candidates:  his brilliant tax-cut proposal. 

Very simply, Giuliani offered what constitutes the largest and most practical tax cut in recent American history. 

For starters, Rudy's plan would make the 2001 and 2003 Bush tax cuts permanent, thereby saving Americans from what will otherwise become the greatest tax increase in its history. 

Second, his plan would reduce America's oppressively high corporate tax rate, which is surprisingly the second-highest in the industrialized world, from 35% to 25%.  During a time of increasing trade deficits and international economic competition, this will immediately allow American entrepreneurs to compete more successfully on the world stage. 

Third, Giuliani's proposal would slash the all-important capital gains tax from its current 15% to 10%, thereby igniting business activity, profits and job-creation across the country.  By now, the beneficial effects of capital gains tax cuts are simply beyond dispute, and his plan would provide stimulus in this critical area. 

Fourth, the Giuliani plan repeals the hated Death Tax, which actually ends up penalizing working Americans and middle-class families more than it does the wealthy, who can afford tax accountants to avoid the tax.  Under Rudy's reform, relatives of deceased owners of small businesses and family farms would finally be free of this terrible penalty. 

Furthermore, Giuliani's tax proposal would provide much-needed indexing of the Alternative Minimum Tax for inflation, and ultimately eliminate it.  His plan would also revive the Research and Development Tax Credit, which recently expired, and expand Roth IRA-style lifetime, educational and retirement savings accounts. 

In addition to being the largest tax cut proposal in recent history, however, Giuliani's plan would also dramatically simplify the tax code itself. 

As it stands, our current code is extremely confusing, and requires families to spend hours upon hours filling out return forms in time for the annual April 15 deadline.  According to the Office of Management and Budget, in fact, Americans today waste some 6.5 billion (that's with a "b") hours each year completing their tax forms. 

Giuliani's plan would change that by allowing families to instead opt for an easy-to-understand, one-page "Fair and Simple Tax Form" (FAST) if they so chose.  Imagine replacing those maddening 1040 forms with a simple, one-page form that applies just three simple tax rates:  10%, 15% and 30%.  Additionally, the FAST form would preserve those deductions most popular with American taxpayers - mortgage payments, charitable contributions, child tax credits and state and local taxes. 

Most filers would likely choose this simplified one-page option, which would reduce federal taxes by approximately $2,200, or 24%, for a family of four earning $80,000 each year.  Other filers, however, would remain free to complete the existing forms.  That is one of the best aspects of Rudy's plan for those who might otherwise oppose it - the existing system would remain in place should tax filers prefer to use it. 

Congressional leaders have recognized the wisdom and effectiveness of Giuliani's tax plan, and embraced it as proposed legislation.  Representatives David Dreier (R - California) and Roy Blunt (R - Missouri) have introduced it as a bill in the House of Representatives, and Senator Christopher Bond (R - Missouri) has introduced it in the Senate. 

Mayor Giuliani has served America well, and stands as a hero for good reason.  From cleaning up a previously incorrigible and lawless New York City, to achieving well-deserved status as "America's Mayor" during 9/11 and its aftermath, to running an admirable campaign for President, he can be extremely proud of his record.  Now, Congress and the remaining candidates must work to preserve his latest positive legacy:  the largest and most practical tax reform proposal in modern American history. 

The time is now.