In his disjointed victory speech last night, Rick Santorum said virtually nothing about the top issue for the country: the economy. The closest he came was his riff on energy. (“We’re seeing gas prices at what are projected to be historic highs. And yet this president almost put this whole region out of business. By — because of the extreme environmental policies of this administration. And we wanted to be here in Lafayette [La.] to say to average folks who are struggling right now because of those energy prices, we will put this town and this region back to work so you can go back to work and have a better quality of life.”) It is revealing that his bread-and-butter themes — the Constitution, faith and his underdog-ness — do not include an economic message.
As often as Santorum says he is going to migrate back to economic themes, he never seems to make it. That may be because his own economic views aren’t very conservative, and his tax plan has more in common with the president’s tax philosophy than with libertarians’ and Republicans’ views.
Kevin Hassett and Glenn Hubbard (a Mitt Romney economic adviser) take to the op-ed page of the Wall Street Journal to blast the president’s and also Santorum’s corporate income tax reform plans:
The plans of Messrs. Romney and Santorum have significantly more promise. Both would bring down rates on corporate and noncorporate income, though only Mr. Romney would do so in a revenue-neutral way (the Santorum plan adds greatly to federal deficits). According to one study, a top marginal tax rate on individual incomes of 28% as proposed by Mr. Romney, compared with Mr. Obama’s proposed top marginal rate of 39.6%, would increase the wage bill of noncorporate businesses by over 6%, raise investment by 10%, and push business receipts up by 16%.
And by proposing special tax breaks for manufacturing, Mr. Santorum follows Mr. Obama’s incorrect lead and introduces a significant economic distortion. In a world with highly mobile capital, tax policy needs to be neutral toward different forms of business activity and not succumb to the temptation to pick winners and losers. We are aware of no serious economic argument to support such a policy direction.
Romney has succeeded (in Michigan and Ohio) when he has emphasized his own economic vision. As he heads from the Bible Belt to Illinois and other states, he’d be wise to keep pounding away and to offer a compelling contrast between his plan and the president’s and Santorum’s.
Santorum likes to say that “bold contrasts” are the way to win the White House. It seems that there is an opening for Romney to argue that he is the candidate who most sharply contrasts with the president’s economic illiteracy, penchant for picking business winners and losers and bizarre effort to make the United States even less competitive overseas. (Romney’s territorial tax system is the exact opposite of Obama’s new minimum tax on foreign earnings.)
Santorum doesn’t talk as much about economics because it’s not in his wheelhouse; Romney would be smart to show that’s not the case with him.