Thursday, September 10, 2015

Jeb Bush’s new tax plan: A revenue-eating wolf in sheep’s clothing - The Washington Post

 Jeb! claimed on the first night of Colbert's Late Show that he is more conservative than his brother.  Yesterday he set out to prove it - with huge tax cuts that would gut social welfare and education spending but leave the military intact.  It's more voodoo economics - more trickle-down economics, slower job growth, more lost buying power, lower wages - except for the top end which will thrive.  - gwc

Jeb Bush’s new tax plan: A revenue-eating wolf in sheep’s clothing - The Washington Post

by Jared Bernstein

It seems like just yesterday we were pointing out that a) the arithmetic in Republican presidential candidates’ tax plans didn’t add up, and b) they were highly regressive.
Well, crank up the old calculator, because Jeb Bush’s new tax plan appears to have both of those problems, big time. We’ll have to wait for scorekeepers like the Tax Policy Center to run the tables, but based on the prior scores for plans that cut high end taxes less regressively than Gov. Bush does, as well as some of his team’s own numbers, I can confidently assert that the plan loses piles of revenue. Perhaps that’s the point, but if so, it’s a serious problem for our fiscal accounts, our economy, and the ability of our government to do what we need it to do.
The plan whacks the tax take by lowering marginal tax rates, which is of course the core principle of supply-side economics since some waiter was foolish enough to give Art Laffer a napkin and a pen. On this front, Jeb! deeply doubles down even relative to past Republican tax plans. He takes the income tax rate down from about 40 percent to 28 percent (Republican Dave Camp’s plan went to 35 percent). He takes the corporate rate from 35 percent to 20 percent (Camp went to 25 percent), and allows for full expensing (immediate and full deduction) of capital investments. He goes to a territorial system so foreign profits would no longer be taxed when repatriated back here. He eliminates the estate tax and the alternative minimum tax. There’s a bump down in the rate for unearned income (cap gains, dividends).
These are just absolutely huge, regressive changes, far bigger than his bro’s, and really–what did we get for all of W’s supply-side cuts? Growth, jobs, and productivity had little to show for them, while after-tax inequality significantly worsened.

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