Rudy Giuliani on Tax Reform

Former Mayor of New York City; Republican Candidate for 2000 Senate (NY)


Reduce the capital gains tax, permanently

Q: You’ve in the past supported a wide array of tax cuts. Do you think it’s a mistake that they’re not in Bush’s economic stimulus package?

A: I think this package, for what it does, is okay, and I would support it, but it doesn’t go far enough. I think in the face of what’s been going on, which obviously is a matter of serious concern, we should be very aggressive. [I support] legislation introduced that would be the largest tax reduction in American history. It would take the Bush tax cuts, make them permanent, reduce the corporate tax, reduce the capital gains tax, reduce taxes on those things that would allow business to see America as more competitive. And you almost don’t have a distinction any longer between temporary and permanent in the kind of an economy that we live in.

Source: 2008 GOP debate in Boca Raton Florida , Jan 24, 2008

Cut taxes strategically: only those that bring more revenues

Q: At a time of big budget deficits and huge expenditures, you’re going to cut taxes, so where is the money going to come from? That’s the big criticism of your tax cut plan.

A: Well, it would be a criticism of anyone’s tax cut plan. That was the criticism of the Bush tax cut plan or the Reagan or the Kennedy tax cut plan. I would cut taxes strategically. I would cut taxes that would bring us more revenues. And also, during the week we’ll also talk about cutting spending.

Source: CNN Late Edition: 2008 presidential series with Wolf Blitzer , Jan 20, 2008

Cut taxes $3,000 for family of four earning $80,000

Q: You say you’re going to propose the biggest tax cut in the history of the US. For a family earning $500,000 a year, how much would that family save as opposed to a family earning $50,000 a year, how much would that family save?

A: Well, we’ve computed it for a family that earns about $80,000 a year. A family of four would save about $3,000 or $4,000. That’s off the single-page form.

Q: How much would a family making $500,000 a year wind up saving potentially?

A: I haven’t calculated it. I haven’t calculated it because I have no idea which ones of the tax cuts are going to happen, which ones aren’t. The one we calculated was for the people who opt for the single form, which I happen to have in my pocket. It’s a single form on which you can fill out your taxes. That would bring you somewhere between 25% to 30% tax reductions, and it would depend to some extent on the number of other deductions that you had.

Source: CNN Late Edition: 2008 presidential series with Wolf Blitzer , Jan 20, 2008

Simplify taxes: plan to file your taxes on one page

We have just announced a program that everyone says is a very bold, creative program to reduce taxes, probably the biggest tax reduction in American history, and a program to simplify taxes so you can file your taxes on one page.

Believe it or not, you can do it on one page. This will result in major tax reduction. A family of four earning $80,000 will save something like $3,000. A family of four earning $120,000 will save something like $7,000--money in their pocket.

Source: 2008 Fox News interview: “Choosing the President” series , Jan 13, 2008

One-page fast form: 24% to 36% reduction in income tax paid

Q: I want to ask you about an example that your campaign gave when talking about your one-page fast form, on your newly-proposed tax plan. You say that a family of four earning $80,000 a year would get a tax cut of 24%, but a family making $120,000 a yea would get a cut of 36%. So if I read that right, your tax cut would help the rich more than it would the middle class.

A: Well, it helps everyone. And it depends on the rates that you fall in. And in fact, the primary benefit are to people that are middle income. And we’re just talking about the tax savings from the fast form. There are other tax reductions that would help balance that also. That was just to show the effect of the fast form. And the fast form is an option, meaning you can file the other form if you want to. So you have the option of doing it on one page with the key deductions maintained, or you can file the longer form. And it might be that under the longer form you’ll get more benefits if you want to take the time to do it.

Source: 2008 Fox News interview: “Choosing the President” series , Jan 13, 2008

Cutting anti-competitive taxes raises more revenue

Q: You have been running ads that say reducing taxes actually will increase revenues. But the bipartisan Congressional Budget Office, as well as other experts, all say that tax cuts add to the deficit, they don’t reduce it. Do you stand by your statement

A: Well, the reality is that some tax cuts do add to revenues. Other tax cuts don’t add to revenues. It depends on the tax cut. And tax cutting has been part of the Bush program, the Reagan program, the Kennedy program, and it always led to significan increase in economic activity. If you cut something like the corporate tax at 35%, you bring it down to 30%, you will get more revenues from that cut, because our corporate tax is the second highest in the world. If you cut some other tax, you might not get those kinds of revenues. So, the question is: What tax are you cutting? Is it anti-competitive? If it is anti-competitive, you’re actually going to get more revenues from that tax cut.

Source: 2008 GOP debate in S.C. sponsored by Fox News , Jan 10, 2008

Recommended 64 tax cuts; accomplished 23 of them

Q: You like to say that you cut taxes 23 times as mayor of NYC, but in fact a number of those tax cuts were enacted over your opposition. There was a case in 1998 where you fought a city council for 5 months when they want today reduce a tax surcharge. And even before 9/11, you had left New York City with almost a $3 billion deficit. So have you exaggerated your record on taxes and spending?

A: Not at all. I actually recommended 64 tax cuts and accomplished 23 of them. 18 of them were the ones I originally proposed, and the balance were ones that I accepted and comprised. So that makes up the 23. The overall tax burden on New Yorkers were reduced by 17% by the time I left office. It was the largest tax cut ever done in the history of the city, it was the largest tax cut done in government, anywhere, in the 1990s, including all city, all state, all federal level, because the federal level raised taxes during that period.

Source: 2008 Fox News NH Republican primary debate , Jan 6, 2008

I am a supply-sider; and I actually made it work

I lowered the NYC income tax rate by 24% from the day I got in until the day I got out. The 24% lower income tax was yielding 42% more revenues. So I don’t just talk about supply side, I actually made it work. I lowered the hotel occupancy tax by 34%, and we were making $200 million more on the lower tax than on the higher tax.

I am a supply sider. I believe if you need more revenue, one of the first things you go look to is an anti-competitive tax. Right now, if we reduced the corporate tax, which is the second highest in the world, 35%, if we reduced it to 30% or to 25%, we would make more money.

And the Bush tax cuts did the same thing. The Bush tax cuts are now yielding the United States government more money than we were getting when we had the higher tax. So, everyone has their record to look to, we have all different pluses and minuses, but from the point of view of being a tax-cutter, I had the best record of anyone in government in the 1990s in cutting taxes.

Source: 2008 Fox News NH Republican primary debate , Jan 6, 2008

FactCheck: Claimed 34% NYC hotel tax cut; actual cut was 14%

Giuliani mangled his tax figures, saying he doesn’t “just talk about supply side, I actually made it work. I lowered the hotel occupancy tax by 34 percent, and we were making $200 million more on the lower tax than on the higher tax.”

There are two hotel occupancy taxes in New York, one local and one state-imposed. The local hotel tax, based on a $200-per-night room, went from 7% to 6%, a cut of 14.3%. This is the one Giuliani would be most responsible for, so his claim of a 34% cut is far too high (The combined state and local tax went from 12% to 6%, a 50% cut.)

Hotel tax revenues didn’t rise as much as he says, either. In 1994 they were $129 million, and in 2001, they were up to $243 million--a respectable increase of 88.6%, but not a jump of $200 million as he claimed.

Overall, a 1997 study found, the city’s 1 percentage point reduction in its hotel occupancy tax rate generated only enough increased activity “to offset as much as half of the direct cost of the tax cut.”

Source: FactCheck.org on 2008 Fox News NH Republican primary debate , Jan 6, 2008

Support a flatter and simpler tax and less corporate tax

A flatter tax, a simpler tax that you could file on a one page, as an option, would be a good idea. Reducing the corporate tax, as I suggested. Reducing income tax rates across the board, which would mostly benefit the middle class. That’s where the focus should be. But we’ve got to reduce taxes across the board, and we should give the death penalty to the death tax. It really is a very unfair tax.
Source: 2007 Des Moines Register Republican Debate , Dec 12, 2007

FactCheck: Cut NYC taxes by $5.4B, not $9B as claimed

Giuliani boasts in his TV ad that “He cut taxes $9 billion.” But to arrive at the $9 billion figure Giuliani takes credit for the passage of 23 tax cuts. We found, however, that 8 of those were state tax cuts, and a 9th was a tax reduction Giuliani vociferously opposed before agreeing to side with the City Council on the matter. Taking away those tax cuts, Giuliani can justifiably claim credit for lowering taxes by $5.4 billion, or $8 billion if he’s credited for the big cut he lobbied against.
Source: FactCheck's AdWatch of 2007 campaign ad, “Challenges” , Nov 27, 2007

Won’t sign no-tax pledge; pledge only to uphold Constitution

Q: Six of your colleagues on this stage have signed the pledge of the Americans for Tax Reform to oppose any increase in marginal tax rates. You say that you were a big tax-cutter in New York, but you did raise fees and fines and, in fact, you even went to court to fight elimination of the commuter tax. Why have you refused to sign?

A: It’s a matter of principle. I think if you’re president, you take one pledge: to uphold the Constitution. It is my intention to lower taxes. I have without any doubt of all the people running for president the strongest record of lowering taxes. I did it 23 times in a city that never lowered a tax before. I made supply-side economics work in a city that didn’t understand it. And I ended up having a very positive impact on the economy of the city as the result of that. But I only think a person running for president should take one pledge, and that is to uphold the Constitution of the United States.

Source: 2007 GOP debate at UNH, sponsored by Fox News , Sep 5, 2007

Letting Bush tax cuts expire means economy would decline

Q: What do you think would happen to the economy if the Bush tax cuts were all left to expire?

A: The economy begins to go in decline. I think we see an outsourcing of jobs. We see a loss of revenue. I think we see it before then. I think we start seeing it in 2008, 2009. I did a forum on taxes, and a guy who runs a medium-size business was saying he’s already starting to hedge his bets against the idea of a major tax increase in 2010. I mean, how many businesses plan three, four, five years ahead

Source: Interview in US News & World Report, “Homeowner Bailout” , Aug 27, 2007

Reducing taxes is a way to raise MORE money

Senator Edwards last week recommended increasing the capital gains tax from 15 percent to 28 percent because he wants more money. Now, Senator Edwards hasn’t had much executive experience because the reality is the last time we raised the capital gains tax, from 20% to 28%, we lost $45 billion. There is a liberal Democratic assumption that if you raise taxes, you raise money. The way to do it sometimes is to reduce taxes and raise more money.
Source: 2007 GOP Iowa Straw Poll debate , Aug 5, 2007

Eliminate the death tax immediately

Eliminate the death tax. That should be eliminated immediately. It makes no sense at all. In 2010, the death tax is going to go to zero percent. And then it’s going to go to 55% in 2011. You do not want to be on a respirator in 2010. And then I would say the most sensible thing to do is to simplify the tax code, reduce taxes, keep taxes low.
Source: 2007 GOP Iowa Straw Poll debate , Aug 5, 2007

Too complex to get to FairTax; focus on reducing taxes

Q: The FairTax would eliminate the income tax, estate tax, payroll tax & capital gains tax and replace it with a 23% sales tax. Do you support it?

A: I would say the most sensible thing to do is to simplify the tax code, reduce taxes, keep taxes low. I think the flat tax and the FairTax are both very intriguing. And if we were starting off at the very beginning with taxation, the first argument I would make is let’s not have any taxes. The second argument I would make is the FairTax or the flat tax would probably be a better way to go.

Q: But you’re not for the FairTax now, correct?

A: It would be too complex to get there. And somebody would have to show me how we’re going to make that transition. And, also, the thought that there wouldn’t be an IRS with the FairTax--well, who is going to administer the sales tax? And who’s going to administer the people that are exempt from the sales tax? And who is going to administer what items might be exempt from the sales tax?

Source: 2007 GOP Iowa Straw Poll debate , Aug 5, 2007

AdWatch: Cut or eliminated 23 NYC taxes; and created surplus

[Giuliani Radio Ad]:

GIULIANI: Every promise I’ve made, running as mayor of NYC, they said couldn’t be done. They said I couldn’t cut crime, NYC was the crime capital of America. Couldn’t be done. NARRATOR: Under Rudy Giuliani’s leadership, crime in NYC drops 56%.

GIULIANI: NYC was the welfare capital of America, 1.1 million people on welfare. You can’t cut welfare, can’t be done.

Narrator: Welfare rolls went down by a staggering 58%.

GIULIANI: They said we couldn’t reduce taxes. They said you couldn’t get control of spending. That’s impossible.

NARRATOR: Rudy Giuliani turned a $2.3 billion deficit into a multibillion-dollar surplus and cut or eliminated 23 taxes.

GIULIANI: My focus when I ran for mayor was on the future, and it will be in this campaign. Leadership is about what we can do, never taking no for an answer. This is all about how America can grow, how America can get stronger, how America can be the country that realizes all the potential that we know we have.

Source: FactCheck's AdWatch of 2007 campaign ad, “Out of Control” , Jul 27, 2007

FactCheck: Cut 14 NYC taxes, not 23 as claimed

A new radio ad boasts that Rudy Giuliani “cut or eliminated 23 taxes” while mayor of NYC, a boast he’s repeated many times on the campaign trail. We find that to be an overstatement. Giuliani can properly claim credit for initiating only 14 of those cuts

In fact, he strongly opposed one of the largest cuts for which he claims credit, reversing himself only after a 5-month standoff with the city council. In addition, the ad’s claim that Giuliani turned the budget deficit he inherited into a surplus, while true enough, ignores the fact that he also left a multibillion-dollar deficit for his successor, not including costs associated with 9/11.

We don’t dispute that all 23 cuts happened while Giuliani was mayor. But by saying “I lowered them,” he takes personal credit for 8 cuts that were initiated not by him but by the state, After our initial article appeared, in an interview posted on YouTube, the mayor said he deserves credit for tax cuts he supported, whether he initiated them or not.

Source: FactCheck's AdWatch of 2007 campaign ad, “Out of Control” , Jul 27, 2007

Adjust the alternative minimum tax & get rid of death tax

Q: Name a tax you’d like to cut.

A: We have to adjust the alternative minimum tax. That has to be reduced. We have to get rid of the death tax. It’s going to go to zero in 2010. And then in 2011, it’s going to go to 55%. And we have to make sure that the tax cuts that went into effect, that that level remains. Otherwise, we’re going to have one of the biggest tax increases in history in 2011.

Source: 2007 GOP primary debate, at Reagan library, hosted by MSNBC , May 3, 2007

Claimed 90s NYC tax cuts reduced deficits

Giuliani’s tax cuts, largely made possible by a temporary bubble in the economy, extracted $2.5 billion a year from the budget. Once the economy cooled off, that left an immense hole that had to be filled if the city was going to maintain vital services.

Tax cuts should be a goal for New York City, considering its heavy taxation. But Giuliani continued to cut taxes in 2001 as the economy headed into a downturn--even as he hiked spending at more than triple the rate of inflation.

Following in Reagan’s footsteps, he promoted the idea that tax cuts would pay for themselves by heating up the economy. “Even though it seems in the short run that cutting taxes means less money for the government, and makes it harder to reduce our deficits, time and again we’ve proven that just the opposite is true,” Giuliani said in 1997.

Source: America‘s Mayor, America‘s President?, by R. Polner, p.137 , May 2, 2007

1994 hotel tax cut was effective, but didn’t raise revenue

[The centerpiece of Giuliani’s trickle-down theory] argument was a small cut Giuliani made in 1994 in the tax on hotel rooms. The combined state and local tax on hotel occupancy was 21.25%--the highest in the country--when he took office in 1994. In some ways, it was an easy tax to increase, since local voters didn’t pay it.

Giuliani argued when he ran for mayor that reducing the hotel tax would increase tourism. In 1994 the state knocked five percentage points off the tax, and the city reduced its tak by one point. “The result has been a boon for our tourism industry, our convention centers, and hotels,” Giuliani said, going on to explain that the city collected more money from the lower tax.

Giuliani cited the example tirelessly, saying it showed that selected cuts would pay for themselves. But a 1997 study found that the tax cut fell short of paying for itself by half. The study didn’t say it was a bad idea to reduce the tax. But it exposed Giuliani’s exaggeration of a solid accomplishment.

Source: America‘s Mayor, America‘s President?, by R. Polner, p.137-8 , May 2, 2007

Lowering sales taxes creates jobs

The more ways that we can find to put money back into the private economy, the more our economy grows. The money gets used to create jobs. I used to be a big advocate of lowering the sales tax in New York, because right around New York we have states tha don’t have a sales tax. We lose an incredible amount of business to those states. If we did away with the sales tax in New York, it would be a jobs program for New York. We’d make back a lot of that tax through the income tax [via the] growing economy.
Source: Interview on “Kudlow & Company”, RealClearPolitics.com , Mar 26, 2007

First day as mayor: reduced sales tax from 6% to 5%

On my first day as mayor, I sent a letter to Governor Cuomo, asking for epeal of the state’s 5% tax, which had been enacted during the first year of my predecessor’s administration. This was a small step, but important symbolically. No one in NYC could remember any tax being reduced, and I wanted to send a message that I believed that lower taxes would stimulate more than enough business to offset any loss in revenue. That is exactly what happened. With more visitors, net revenue from the hotel tax was actually higher at 5% than it had been at 6%.

Economists could have a great deal of fun calculating how much of the rise in visitors was attributable to the tax cut. How much of the increased hotel occupancy came from the drop in crime, how much from the improved quality of life? How much from the positive publicity NY get from those two factors? How much from the dynamics in different economies--factors way beyond the control of any mayor? The exact proportions are impossible to know.

Source: Leadership, autobiography by Rudolph Giuliani, p. 43-44 , Oct 1, 2002

NYC tax reductions of $10.4B through 2003

For the third year in a row, the New York City four-year Financial Plan contains more than a $1 billion surplus and reflects the City’s success in reducing taxes by more than $2 billion since 1994 -- more than any administration in the history of the City. Combined with the $2.3 billion in tax cuts already enacted, this plan will bring the total value of the Mayor’s tax reduction program to $10.4 billion through 2003.
Source: RudyYes.com, “Proven Leadership” web site , Dec 9, 1999

Supports Task Force to continue reduce taxes

Source: RudyYes.com, “Proven Leadership” web site , Dec 9, 1999

Eliminated sales tax on clothes; reduced real estate tax

Source: RudyYes.com, “Proven Leadership” web site , Dec 9, 1999

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Other big-city mayors on Tax Reform: Rudy Giuliani on other issues:

Tom Barrett (D,Milwaukee)
Bill de Blasio (D,NYC)
Rahm Emanuel (D,Chicago)
Bob Filner (D,San Diego)
Steven Fulop (D,Jersey City)
Eric Garcetti (D,Los Angeles)
Mike Rawlings (D,Dallas)
Marty Walsh (D,Boston)

Former Mayors:
Rocky Anderson (I,Salt Lake City)
Tom Barrett (D,Milwaukee,WI)
Mike Bloomberg (I,New York City)
Cory Booker (D,Newark,NJ)
Jerry Brown (D,Oakland,CA)
Julian Castro (D,San Antonio,TX)
Rudy Giuliani (R,New York City)
Phil Gordon (D,Phoenix)
Tom Menino (D,Boston)
Dennis Kucinch (D,Cleveland,OH)
Michael Nutter (D,Philadelphia)
Sarah Palin (R,Wasilla,AK)
Annise Parker (D,Houston)
Jerry Sanders (R,San Diego)
Antonio Villaraigosa (D,Los Angeles)
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