September 10, 2015
Three of the Republican presidential candidates have produced comprehensive plans for tax reform: first Marco Rubio, then Rand Paul and now Jeb Bush. The plans have some common features that set them apart from what Mitt Romney offered four years ago. They're also all vulnerable to one of the attacks that helped to sink Romney.
Here are a few important takeaways:
Republicans are less concerned than they used to be about the budget deficit. Romney promised a revenue-neutral tax reform that cut income-tax rates but made up for it by, for example, scaling back exemptions and deductions. This was in keeping with his general antipathy toward offering "gifts" to voters. Rubio, Paul and Bush say they'll reduce some tax breaks, too, but they're also offering net tax cuts measured in the trillions of dollars. They all claim that their plans would increase economic growth enough to soften the hit to federal revenue. Without added growth, though, their plans would each reduce revenue by between $3 trillion and $4 trillion over the next decade.
It may be that as the deficit has narrowed, Republican politicians have grown less fearful of it, or at least less convinced that voters are fearful of it. They may also have drawn a lesson from Romney's campaign. Cutting popular tax breaks is politically difficult. That's why Romney didn't specify how his plan would add up. But that opened him up to the charge of raising middle-class taxes. The candidates this time around may prefer to be accused of raising the deficit.
Read the full article at Bloomberg View: The Problem With Republican Tax Plans