Granted, it wasn’t hard to see through this particular proposal — Jeb’s economics’ team claims that supply-side
magic dynamics offsets 65 percent of the tax cuts, an unbelievably large proportion, as Bruce Bartlett stresses below. But I still think we should give credit where it’s due.
- Josh Barro of the New York Times focuses on the regressivity of the plan, i.e., the disproportionate cuts for those at the top of the income scale. Remember, in our age of inequality, these are the folks who are already doing better than the rest, so tax plans like this one take a pretax inequality problem and make it a bigger post-tax inequality problem. Barro estimates that the Bush plan would boost the after-tax incomes of people making over $10 million by an average of 6.8 percent; for the average taxpayer in that group, that would have meant savings of about $1.5 million in 2013.
- Catherine Rampell of the Washington Post takes a similar tack, backing out how the plan would affect a rich guy like Jeb Bush himself. Her “quick-and-dirty, back-of-the-envelope calculations based on Bush’s 2013 tax return [suggest that] his liability for that year would have fallen by about $800,000, or about a quarter of what he paid Uncle Sam.” This result doesn’t mean that Jeb!’s motivation was a reduction in his own tax bill, she stresses. But it certainly underscores how much of a boon the plan is to well-off Americans.
- John Cassidy of the New Yorker points out that neither of the Bush boys listened closely enough to their dad: “[Won’t Jeb’s] plan inflate the deficit…? Not in the make-believe world of “voodoo economics” — the term that Jeb’s father, George H. W. Bush, used in criticizing Ronald Reagan’s tax-cutting plans during their G.O.P. primary tussle, in 1980.” By sprinkling supply-side fairy dust, along with, to be fair, some of the minor offsets I noted in my earlier piece, “these policies will unleash increased investment, higher wages and sustained four per cent economic growth, while reducing the deficit,” according to the candidate. But as Cassidy reminds us: “Anyone whose memory extends back to the seventies and eighties will find this language depressingly familiar. The original iteration of voodoo economics didn’t merely involve cutting taxes and directing the bulk of the gains to the ultra-wealthy…The ‘voodoo’ accusation arose from the claim that, because the policies would encourage people to work harder and businesses to invest more, a lot more taxable income would be produced, and the reductions in tax rates wouldn’t lead to a commensurate reduction in the amount of tax revenues that the government collected.”
For the record…didn’t happen.
- Few know this line of argument and history better than Bruce Bartlett, who worked in both the Reagan and Bush I administrations. He debunks the tax-cuts-will-spur-growth-that-reaches-everyone idea over at MSNBC. As Bartlett notes, “The people advising [Bush] have an unblemished record of being wrong and always claiming that tax cuts for the ultra-wealthy will cure all the economy’s ills. The only effect of this discredited ideology has been to make the rich richer while doing nothing for the average American.”
- The first partial analysis of the plan by experts (other than the economists associated with the campaign) was just released by the Citizens for Tax Justice. They report that 53 percent of the income tax cuts from the plan would go to the top 1 percent, average income: $1.7 million. The middle class would get about a $1,000 tax cut, about 12 percent of the total, while the poorest fifth gets about $200, or 3 percent of the total. Note that CTJ does not include the large corporate tax cut, which would further increase the regressivity of the plan.