Republican presidential candidates are sparring on the campaign trail over who can promise the biggest tax cut, with each hopeful insisting they can slash rates, eliminate more pages of the tax code and end more loopholes than the competition.
But many veterans of Washington’s tax wars, from both parties, say it is a fight lacking substance, facts or economic proof.
“We’re early in the campaign and there’s nothing wrong with advocating for a fairer, simpler, pro-growth tax code,” said Alex Brill, a tax expert at the conservative American Enterprise Institute who served as a White House economist under President George W. Bush. “The problem is we have a competition just on who can have the biggest tax cut. We don’t have any real budget constraints pressuring candidates to constrain or offset their proposals in any way. As a tax reform advocate that’s concerning.”
Experts blame the flimsy promises on the fight to stand out in a crowded field of competitors. Each GOP candidate feels like they need a tax plan — and in a crowd this large and noisy, everyone is just battling to come up with the best fiscal quip.
It is not unusual for presidential candidates to make big promises. But unlike in recent decades, the majority of Republican candidates don’t want to tweak the tax code, they want to ditch it completely.
“I think it’s campaign hyperbole, which we always expect but I think inside the Beltway, from K Street to Capitol Hill, nobody’s taking any of these plans seriously,” said Marty Sullivan, the chief economist at Tax Analysts. “They know they would be extremely difficult to implement.”
Carly Fiorina wants a three-page tax code. Ben Carson, Ted Cruz and Rand Paul all want a flat tax with dramatic rate cuts — some to as low as 10 percent. Proposals like those were once relegated to the sidelines — ultimately, Herman Cain’s infamous 9-9-9 plan became a punchline.
This year, only Jeb Bush, Marco Rubio and Donald Trump have proposed plans that are more in the Republican mainstream, including lowering tax rates for businesses and individuals, cutting loopholes and eliminating deductions touted by Mitt Romney and former vice presidential candidate and now Speaker Paul D. Ryan (R-Wis.).
The 2016 candidates aren’t even making the argument that their plans would be revenue neutral, meaning they would collect as much money as the current system, something previous Republicans have been careful to emphasize. The proposals floated so far would add significantly to the debt by cutting revenue, according to budget experts, making it difficult for their authors to claim they seriously mean to tackle the deficit.
The Committee for a Responsible Federal Budget, a non-partisan group that advocates for lower deficits and reducing the growth in debt, released a graphic this week showing the amount each of the candidate’s tax plans would cost.
At $1.8 trillion over ten years, Paul’s plan would produce the least amount of debt, while Trump’s proposal would produce the most at $12 trillion. The plans each produce slightly less debt when a scoring method is used that takes into account the economic growth they could generate.
Candidates could, of course, offer corresponding plans to cut spending, always more politically tricky, to plug the hole. But those have yet to be released.
Brill, who also served as policy director and chief economist at the House Ways and Means Committee, said he likes seeing tax reform discussed so widely, but the debate should acknowledge what is actually possible. Advocates of more conventional reform will be a big part of writing any future tax legislation, no matter who wins the White House.
“Obviously Paul Ryan will play a big role in this and Democrats in the Senate will play a huge role in this as well,” said Brill. “Those are all very real constraints.”
The candidates’ radical tax ideas also drew criticism from Ohio Gov. John Kasich during the Nov. 10 GOP debate. Kasich called out his colleagues for making big promises without constraints.
“And, you know, the simple fact of the matter is, we hear a lot of promises in this debate, a lot of promises about these tax cuts or tax schemes sometimes that I call them,” he said. “We’ve got to be responsible about what we propose on the tax side.”
Kasich may be in line with the mainstream in Washington, but his message doesn’t appear to be resonating with voters. He is averaging just 3 percent in national polls, according to Real Clear Politics.
More modest tax proposals may still win out when candidates start to factor in the real constraints of implementing a plan. The reality is that it is extremely difficult to eliminate any deductions or benefits.
“The problem with the flat tax is you greatly reduce taxes on the wealthy and you greatly reduce taxes on the poor,” Sullivan said. “The folks who get stuck are the middle class. That’s what always comes out of these calculations.”
So far, none of the candidates have been seriously pressed to explain the real world economics of their plans or fill in the details of how their ideas would be implemented. Instead, each one has committed to increasingly drastic reform ideas that could be hard to defend in a general election.
Brill said he expects some candidates will eventually be forced to scale back their promises and identify a few small areas where they can really make a difference. But that shift risks alienating voters who were excited and motivated by aggressive tax-utting promises.
That’s why Ken Kies, managing director of the tax policy advising firm Federal Policy Group, said no when several candidates approached him to help write their tax plans.
Kies was the chief Republican tax counsel on the Ways and Means Committee from 1982 to 1987, and helped write the last major tax code overhaul in 1986.
“People kind of feel like they’re supposed to have a tax plan if you’re a serious candidate,” he said. “But debates are not the right format for trying to discuss and sell a serious tax plan.”
Kies — also served as the chief of staff for the Joint Committee on taxation and is currently a prominent tax lobbyist — said serious tax policy will be the result of long, serious negotiations, not timed bouts on a public stage. He advised every campaign that approached him to hold off on putting out big tax proposals.
“They didn’t take my advice,” he said. “If you can’t defend it in 30 seconds you’re losing.”