Posted on 12/02/2014 6:59:08 AM PST by SeekAndFind
The midterms are over, meaning the 2016 White House race has begun. Here's my bold prediction: Almost all the GOP presidential contenders will offer a big tax-cut plan.
Of course they will.
Income tax cuts have been the defining issue of the modern Republican Party since the 1980 election of Ronald Reagan. As conservative political reporter Robert Novak once declared, "God put the Republican Party on earth to cut taxes. If they don't do that, they have no useful function."
And if history is a reliable guide, most of those tax-cut plans will focus on cutting personal taxes so the richest Americans pay dramatically less to Uncle Sam. For instance: The 1 percent would have paid $150,000 a year less under Mitt Romney's plan in 2012, $238,000 less under Herman Cain's "9-9-9" plan, and $340,000 under New Gingrich's flat-tax plan. More recently, incoming House Ways and Means Chairman Paul Ryan has produced budgets lowering the top rate — currently 40 percent — to 25 percent, which would be its lowest level since the 1920s Coolidge administration. Americans might naturally conclude that the GOP's big, bold agenda for boosting economic growth, job creation, and middle-class incomes begins with letting the rich keep more of what they make.
And sometimes lowering top tax rates is pretty important, like back in 1980 when the top marginal rate was 70 percent. Even President Barack Obama has acknowledged, in his book The Audacity of Hope, that slashing the rate then was probably a good idea. But as an economic strategy today, such rate cuts are problematic.
First, there's little evidence they will supercharge the economy. Modeling of a recent plan put forward by Rep. Dave Camp (R-Mich.), the outgoing Ways and Means chairman, suggests it would increase the economy's size by less than 1 percent over a decade. Second, the income gains from modestly faster growth might not reach the middle class, where after-tax income has been stagnant for nearly a decade. The Congressional Budget Office recently found that top income growth has been five times faster than middle-income growth over the past 30 years.
Finally, sharply cutting top rates will lose the government trillions in revenue at a time the national debt is at historically high levels — unless, that is, lots of tax breaks are also eliminated. But many of those — such as the Earned Income Tax Credit — benefit middle- and working-class Americans, which is why more than 40 percent pay no federal income taxes, according to the Tax Policy Center.
Surely Republicans wouldn't raise taxes on the beleaguered middle to help pay for high-end tax cuts? Some might. Recently Stephen Moore, chief economist at the GOP-aligned Heritage Foundation, argued that tax reform should "ensure that everyone — except the very poor — pays at least some income tax." Keep in mind that according to the 2012 exit polls, Mitt Romney lost to Obama 86 percent to 16 percent among voters who most valued empathy in their presidential pick. Is the party shooting for 100-0 next time around? Hillary Clinton would like to know.
If Republicans want to cut income taxes, they should make sure the middle class directly benefits — even if some rich people pay more as an offset.
A plan put forward by Senators Mike Lee (R-Utah) and Marco Rubio (R-Fla.) would expand the child tax credit and apply it against both income and payroll taxes, the latter of which is what really hits most lower- and middle-income families. A more targeted plan from American Enterprise Institute economist John Makin would focus on cutting payroll taxes for households earning less than the median income, or about $52,000 per year. Such measures could be a key part of a pro-growth, pro-middle class agenda that also includes making a college education and health insurance coverage more affordable, and expanding income subsidies for low-skill workers. Oh, and cutting business taxes, too, since workers part at least part of that burden.
The GOP needs a new "useful function" — helping middle-class class and poor Americans climb the opportunity ladder.
the tax simplification act of 1986 was the biggest tax increase in history.
It eliminated all the provisions that allowed you not to pay taxes, even though the top rate was 70%, and cut it to just under 40%.
Reagan screwed us royaly!
I pay more now when i’m in the 10% bracket than in the 70s and 80s when my income was way over $100k/year.
No need to go and promise any tax cuts...
Just promise to cut government. Slash it. Get it down to limited (the key word) size.
The rest on taxes, the deficit, and so on, will follow.
problem is, the only people who pay taxes are “the
rich”
defined as anyone with an extra dime in their pocket after meeting living expenses
Set the goal to limit the federal government to its legally defined scope. That legal definition is written down... somewhere.
Let me see. Is it better for the economy for the rich to invest their money or for them to give it to the government to waste?
Why not. Its what Obama and the left are doing in reverse - they haven't raised taxes, they've grown the hell out of government knowing tax increases will have to follow on someone else's watch.
And at least cutting government will grow the private sector.
Rick Santorum drew a fair bit of support from blue collar taxpayers by talking about eliminating the taxes imposed for manufacturing things.
It wasn’t so much that it was money directly in their pockets but it is something that the average blue collar guy understands as a job creator.
Unfortunately the Romneyites went rabid about Santorum “screwing the rich” with a 12% cut in capital gains taxes rather than 14%. I personally found it odd that they couldn’t figure out that a factory is part of the corporation and the corporation was getting big cuts, just not all in the same place.
I agree with 100% of what you said.
But that 1% have made out for reasons of tax code nuances and cronyism, not due to tax rates. As another poster said, time may be ripe now for overhaul of IRS code and the 80 thousand page tax code.
To just say “tax the rich” is not right, nor is it conservative. To say quit having a government making certain connected people rich certainly is the essence of limited gov conservatism.
“Pethokoukis may have a point here. After all, the 1 % have made out like bandits during Obozo’s administration.”
No, he doesn’t have a point. The 1% only made out because the federal reserve artificially keep interest rates at near zero, which forced all available cash into the stock market. With that much to be made in the market nothing was invested to create new jobs.
The rich will always get richer when Keynesian morons destroy the economy, which is what the RATS did when they took control.
They have made out like bandits due to ZIRP and quantitative easing, not because of low taxes. It's the monetary policy side where we need to get to work.
great minds think alike and within seconds of one another
The rich didn’t get that way by being stupid. When the market dumped they took their money and bought into the market, while the stupid got scared and moved theirs to something earning 0.5 interest!
Inflation ate all the stupid money, and the rich got richer buying up the market at bargain basement prices!
Translation: The GOP needs to be more Marxist to win.
Pray America is waking
*0.5 %%%
It was just over a month ago that there were headlines screaming, “How the GOP can blow the 2014 election”. I’m glad we are moving on.
The argument is moot concerning a GOPe platform.
“A lie will be halfway around the world before the truth gets its pants on.”
Mark Twain
I thought they were created to end slavery and protect marriage, originally.
Google says this author is a conservative. Could have fooled me.
Bingo! Overhall of the tax code is what is really needed, along with eliminating insider trading among politicians who become millionaires because they know when something is going to happen BEFORE it happens, sorta like the big contract sale of USPS post offices being awarded to a certain senator’s husband.
What I am saying is if a Republican runs on something other than “tax cuts, tax cuts”, something like immigration, then we’ll have a winner. And, since we have debt that is 17 trillion, something needs to be done about that if we are to have any future whatsoever.
I agree the Fed and QE has made the 1% richer than ever, all just to make Obozo look good.
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