Johnson’s reputation as one of the most economically successful Republican governor of the last couple of decades accords his opinions and arguments on the subject with a certain degree of weight. He believes that the American economy is inherently mismanaged and teetering on the brink of a major collapse, and can only be stabilized by implementing a three pronged approach involving spending cuts, tax cuts and minimizing federal interference in the national economy.
# 1 Cut Spending
This recession has forced families and businesses across America to make hard choices and limit their expenditures. We must now expect our elected officials to make the tough calls that will keep our government on a sustainable path moving forward. We must restrain spending across the board:
• Revise the terms of entitlement programs such as Medicare, Medicaid, and Social Security, which threaten to bankrupt the nation's future.
• Eliminate the costly and ineffective military interventions in Iraq and Afghanistan; limit defense spending to actions that truly protect the United States.
• Stop spending on the fiscal stimulus, transportation, energy, housing, and all other special interests. The U.S. must restrain spending across the board.
# 2 Cut Taxes
The U.S. tax system imposes an enormous toll on productivity through high marginal rates, absurd complexity, loopholes for the well-connected, and incentives for wasteful decisions. A better, fairer system will be:
• Abolish the Internal Revenue Service.
• Enact the Fair Tax to tax expenditures, rather than income, with a 'prebate' to make spending on basic necessities tax free.
• With the Fair Tax, eliminate business taxes, withholding and other levies that penalize productivity, while creating millions of jobs.
• Suggested Reading: www.FairTax.org
# 3 Reduce Federal Involvement in the Economy
Much federal intervention is a payout to special interests or counterproductive meddling that stifles competition, innovation, and growth.
• Reject auto and banking bailouts, state bailouts, corporate welfare, cap-and-trade, card check, and the mountain of regulation that protects special interests rather than benefiting consumers or the economy.
• Restrict Federal Reserve policy to maintaining price stability, not bailing out financial firms or propping up the housing sector.
• Eliminate government support of Fannie and Freddie.
• Reduce or eliminate federal involvement in education; let states expand successful reforms such as vouchers and charter schools.
• Legalize, tax, and regulate marijuana, rather than wasting money on an expensive and futile prohibition.
• Eliminate needless barriers to free trade and make it easier for would-be legal immigrants to apply for work visas.
Source: Campaign Website, garyjohnson2012.com/issues/economy-and-taxes Bill Hemmer: If you were to be the nominee, what’s your plan for the economy?
Gary Johnson: Well, balance the budget first and foremost. So Gary Johnson would submit a balanced budget for the year 2013. I would eliminate the federal corporate income tax, reestablished this country as the only place to grow business, nurture business. And then regarding our own taxes, eliminate the income tax, eliminate the IRS, replace it with a consumption based fair tax, which by all reckoning from a free market economist, would actually be just that.
Hemmer: You’re cutting across the board when it comes to taxes, just about every area. Now when you were Governor of New Mexico, did you cut taxes?
Johnson: You know, cut taxes but not as significantly as I think they should have been cut. What I did provide in New Mexico was certainty, and that’s another component when it comes to the federal government, to provide certainty to business.
Right now we’re not building coal-fired electrical generation facilities because of the uncertainty regarding cap and trade, environmentally. How much is it gonna actually cost to build these new coal fired plants? Because of that, I think there’s an example of potentially hundreds of thousands of jobs that could be brought online just removing that uncertainty.
Hemmer: Back on the tax issue, how much, by what percentage, did you cut taxes in your home state?
Johnson: Well, I would argue not nearly enough. When I talk about fair tax,
Hemmer: You have a number?
Johnson: I think a $114 million. More significantly was the fact that I would’ve vetoed 750 pieces of legislations. I would’ve add thousands of line item vetoes that really gave certainty to business and it wasn’t gonna get worse. Because I ran state government, because I ran the agencies, there was really certainty that actually things were better.
Hemmer: I saw that on your record. I also saw that you cut a thousand state jobs. Why was that necessary?
Johnson: Well, just managed attrition, that was all. The notion that government could be more efficient. And I think that cutting 1,200 state jobs over an eight year period, that never happened before. I think that spoke volumes to government state employees doing a better job with fewer people.
June 23, 2011: Johnson on Fox News Insider with Bill Hemmer
Neil Cavuto: What do you make of this plan some Democrats are looking at, that is, making spending part of that discussion?
Gary Johnson: Really, I just see it as more of the same. President Johnson -- that would be me -- would propose a balanced budget for the year 2013. I would eliminate the corporate income tax, recognizing that it’s a double tax, and reestablishing this country as the only place to grow, nurture, develop, develop business.
I think if you just take the stimulus over the last couple of years, pretend like we didn’t do that, and if we would’ve applied that to the elimination of the corporate income tax, I think we would be seeing some real results from those seeds being planted a couple of years ago.
Cavuto: Governor, there’s always a gap between the cut in taxes and the revenue generated to Washington. In the interim, in the loss of that tax revenue, you have a dip. In other words, deficits get worse. Now, the money comes in, like gangbusters, actually, but, in Washington’s past, it is spent equally fast in Washington. How, as president, would you stop that?
Johnson: Well, I think that you point out a reality. And taking that reality, do you spend more money in ways that are, I think, a proven wrong with the last two stimulus packages? How about apply it to real fundamental change, like I say, eliminating the corporate income tax, provide certainty when it comes to business, something that government really can do?
If you just look at the coal-fired electrical generation industry, we’re not building new coal-fired plants because of the uncertainty of CO2 emissions and what ultimately these plants are gonna cost. Just do away with that uncertainty; I think you are talking hundreds of thousands of jobs. And then, when it comes to taxes for you and I, I think we should be looking at eliminating the income tax, the IRS, and replacing it with a consumption tax, a fair tax, which, by all free market economists’ reckoning, really is just that. A fair tax would promote taxes, the notion of fairness and the notion of savings.
June 22, 2011: Johnson on Your World with Neil Cavuto