Former Minnesota Governor Tim Pawlenty outlined his tax cut proposals during a speech in which he called for lower tax rates than other Republican presidential candidates have suggested so far.

In a speech at the University of Chicago on Tuesday, Pawlenty called for just two tax rates, at 10 percent and 25 percent, for individuals and small and midsized businesses organized as S Corps and LLCs.

“On the individual rates we need a simpler, fairer and flatter tax system overall,” he said. “I propose just two rates, 10 percent and 25 percent. Under my plan, those who currently pay no income tax would stay at a zero rate. After that, the first $50,000 of income or $100,000 for married couples would be taxed at 10 percent. Everything above that would be taxed at 25 percent. That’s it.”

Pawlenty also said he would eliminate the capital gains tax, interest income tax, dividends tax and the estate tax.

For corporations, Pawlenty called for cutting the top rate from 35 percent to 15 percent.

To pay for the tax cuts, Pawlenty said he would eliminate unspecified tax loopholes and subsidies. “The Tax Code is littered with special interest handouts, carve-outs, subsidies and loopholes,” he said. “That should be eliminated.”

Pawlenty also said he would aim to grow the economy by 5 percent a year instead of the current rate of 1.8 percent. He also proposed capping and block-granting Medicaid to the states, raising the Social Security retirement age for the next generation, and slowing the rate of growth in defense spending. He also said Congress should grant the President temporary emergency authority to freeze spending at current levels and impound up to 5 percent of federal spending until the budget is balanced. Pawlenty claimed that cutting 1 percent of overall federal spending for six consecutive years would balance the federal budget by 2017.

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