UPDATE: A lot of additional details are now available at Bush’s campaign site. There’s too much to try to summarize here, so I encourage you to check it out to find whatever might pique your interest most. Note that there still is no estimate of the aggregate size of the tax cut, though there are estimates for certain individual filers.
Jeb Bush’s campaign has not been going according to plan, to put it mildly. The man who was presumed the front-runner just by entering the race has watched as political novices Donald Trump and now Ben Carson have soared past him. While Mitt Romney often trailed during the run-up to his primary victory in 2012, it’s also worth noting that Romney:
a) never fell below second in the Real Clear Politics average of national polls;
b) never fell below 15 percent in that average; and
c) maintained a generally upward movement even as other candidates rose above him and later fell below him.
With Carson’s sudden rise, Bush has now fallen afoul of all three of those guidelines (though it’s only fair to point out that Bush faces a significantly more crowded field than Romney did).
If Bush is going to return to the top, he won’t do it by trying to out-Trump The Donald. He’ll do it by persuading Republican voters he’s their best chance to win and govern as a conservative. And he is taking a stab at that today by unveiling his tax plan, first in an op-ed in the Wall Street Journal.
Consistent with his campaign so far, Bush frames the issue in terms of getting the economy to grow more quickly. So many of the problems we face — from mediocre job growth to stagnant wages to food-stamp dependency to deficits and debt — stem from the subpar economic growth of the past several years, which has been closer to 2 percent annually than the 3-plus percent of the previous half-century. Over time, that means trillions of dollars in lost sales for companies, wages for workers and tax revenues for government.
Bush has talked about the need to hit growth of 4 percent annually, and he says his tax plan will help us get there. You can read the whole thing, but here are the highlights:
- Unlike some tax reformers who only talk about making the tax code simpler in a revenue-neutral way, Bush makes it clear he wants to cut taxes: “I want to lower taxes,” he writes, later noting that as governor of Florida he “cut taxes every single year — returning a total of $19 billion to Floridians.” He does not specify how large a tax cut his plan would yield nationally.
- Unlike Romney, whose campaign was severely damaged by a video showing him talking about the “47 percent” of Americans who don’t pay income taxes, Bush sees fewer taxpayers as a feature of his plan, not a bug. “With this reform in place, roughly 15 million Americans will no longer bear any income-tax liability,” he writes.
- Individual income taxes would be reduced to three brackets: 10 percent, 25 percent and 28 percent. He does not identify the cut-off for each.
- It also sounds like he is adopting the ground already staked out by Trump of eliminating the carried-interest loophole, though he doesn’t put it in those exact words. “(W)e will treat all noninvestment income the same,” he writes, “so unless you stake capital in an investment, you won’t be able to claim the capital-gains tax rate on your market gains.” That tax treatment has always been fair game in a comprehensive tax reform — Democrats tend only to want to close it on its own, and the context in which Trump might do it is unclear — but few Republicans have actually said they’d include it in such a reform before now.
- That’s not the only element of Bush’s plan with a populist tint: “I want to eliminate the convoluted, lobbyist-created loopholes in the code. For years, wealthy individuals have deducted a much greater share of their income than everyone else. We will retain the deductibility of charitable contributions but cap the deductions used by the wealthy and Washington special interests, enabling tax-rate cuts across the board for everyone.”
- All that said, the plan retains many elements of traditional GOP tax-reform plans. “It eliminates the marriage penalty, expands the Earned Income Tax Credit, ends the death tax, retires the Alternative Minimum Tax and ends the employee’s share of the Social Security tax on earnings for workers older than 67,” Bush writes.
- Elsewhere, he describes about significantly overhauling business taxes: lowering the corporate income tax rate “from 35 percent — the highest in the industrial world — to 20 percent, which is five percentage points below China’s”; ending the practice, uncommon elsewhere in the industrialized world, of taxing overseas profits of U.S. companies; levying a one-time, 8.75 percent tax on corporate profits already earned overseas and legally taxable if repatriated; and “allow(ing) businesses to fully and immediately deduct new capital investments — a critical step to increase worker productivity and wages.” The latter move would be paid for by eliminating “most corporate tax deductions,” including one for borrowing costs that, he writes, encourages companies to take on debt.
This kind of stuff doesn’t grab headlines in the same way that threats to deport 11 million people do, but it’s more realistic and would be much better for the economy. Whether this plan and others help boost Bush’s sagging poll numbers or not, it’s the kind of tax plan the eventual Republican nominee needs to promote.