February 4, 2016
The presidential candidates are dropping like flies now, so let's see who of the survivors has the most pro-growth tax plan.
All the Republican candidates have crafted plans that would slash tax rates for everyone, and most would vastly simplify the thousands of pages of IRS tax code too.
This chart shows how low tax rates would go under the GOP plans:
Sen. Ted Cruz has a flat tax plan borrowed from a blueprint in Return to Prosperity, a book that Arthur Laffer and I wrote. The plan has drawn some criticism on the right of late, though these attacks are mostly baseless.
Ben Carson wants a low-rate flat tax, too, and he would heroically eliminate ALL special interest deductions and carve-outs. Jeb Bush, Chris Christie, John Kasich and Donald Trump want to cut personal income tax rates down to between 20 and 25 percent while eliminating indefensible loopholes.
One common goal of nearly all these plans is to turbocharge growth by dramatically lowering the business tax rate (now the highest in the world) and reducing the punitive double taxation of investment income. Most GOP plans would cut the corporate/business tax to between 15 and 25 percent.
All of this contrasts sharply with the two Democratic candidates’ plans. Former Secretary of State Hillary Clinton and Sen. Bernie Sanders seem to be in a weekly bidding war to see who can raise tax rates the most. Clinton favors hiking maximum capital gains and personal income tax rates to the mid-40s or higher. Sanders said last week that he wouldn't go to a 90 percent tax rate, but anything below that seems to be fine by him.
The Tax Foundation has recently ripped both of these plans, finding that they would lower business investment and cut middle income pay by about 10 percent over a decade. Somehow making the middle class poorer is supposed to strike a blow for equality. Since most of the rich who would be plucked are business owners and investors, wage and salary workers would subsequently suffer the collateral damage. In short, wealth redistribution is not an economic growth or jobs program.
I'd take any of the GOP plans over the current tax laws. But my preference is a flat tax, and that gives the nod to Cruz and Carson.
Stephen Moore is a Fox News contributor and an economics consultant with Freedom Works.