“A Rerun Of What His Brother Tried”: Jeb Bush’s Tax Plan Shows Republicans Can’t Learn From Economic History
Jeb Bush released the first details of his tax plan today in a Wall Street Journal op-ed, so we finally learn the secret that will produce spectacular growth, great jobs for all who want them, and a new dawn of prosperity and happiness for all Americans. Are you ready?
It’s…tax cuts for the wealthy! If only we had known that this amazingly powerful tool was available to us all along!
To be fair, not everything in Bush’s tax plan is targeted at the rich — there are some goodies in there for other people as well. But it’s pretty clear that in addition to wanting to revive the Bush Doctrine in foreign affairs, Jeb is looking to his brother’s tax policies as a model for how we can make the economy hum, I suppose because they worked so well the first time.
While many of the details are still vague, here are the basics of what Bush wants to do. He would reduce the number of tax brackets from its current seven down to three, of 10 percent, 25 percent, and 28 percent. This would represent a huge tax cut for people at the top, who currently pay a marginal rate of 39.6 percent. He also wants to eliminate the inheritance tax and the alternative minimum tax (both paid almost entirely by wealthy people), and slash corporate taxes. On the other end, he’d raise the standard deduction and expand the Earned Income Tax Credit, which helps the working poor. He would also eliminate the carried interest loophole, which allows hedge fund managers to pay lower rates on their income.
“We will treat all noninvestment income the same,” he says, which is a reminder that investment income, which is mostly gained by wealthy people, would still be treated more favorably than wage income, which is what working people make.
As Dylan Matthews notes, Bush’s plan is something of a compromise between the supply-siders and flat-taxers who think that cutting taxes on the wealthy is literally the only thing necessary to spur the economy, and the “reform conservatives” who would give the wealthy some breaks but put more of their effort toward changes affecting the middle class. But the biggest problem with Bush’s plan may not so much the particulars, but the fact that he believes that making these changes will “unleash” the American economy.
We’ve had this debate again and again in recent years, and every time, events in the real world prove Republicans wrong, yet they never seem to change their tune. When Bill Clinton’s first budget passed in 1993 and raised taxes on the wealthy, Republicans said it would cause a “job-killing recession”; what ensued was a rather extraordinary economic boom and the first budget surpluses in decades. When George W. Bush cut taxes in 2001 and 2003, primarily for the wealthy, they said that not only would the economy rocket forward into hyperspace, but there would be little or no increase in the deficit because of all that increased economic activity. What actually happened was anemic growth and dramatically increased deficits, culminating in the economic catastrophe of 2008. When Barack Obama raised taxes, Republicans said the economy would grind to a halt; instead we’ve seen sustained job creation (despite weak income gains).
The lesson of all this, to any sane person, is that changing tax rates, particularly the top marginal income tax rate, has little or no effect on the economy. Yet Jeb Bush wants us to believe that his plan will produce sustained growth of 4 percent or more — something no president since Lyndon Johnson has managed — with what is essentially a rerun of what his brother tried.
He’s hardly alone in this belief. Indeed, with the bizarre exception of Donald Trump, all the Republican candidates put tax cuts that would benefit the wealthy at the center of the their ideas for helping the American economy. So why can’t they learn from history?
The answer is that for conservatives, cutting taxes on the wealthy is less a practical instrument to produce a healthy economy than it is a moral imperative. When they talk passionately about the crushing burden taxation imposes on the “job creators,” those noble and virtuous Americans whose hard work and initiative (even when it comes in the form of waiting for their monthly dividend checks) provide the engine that moves the nation forward, you can tell they believe it deep in their hearts. If cutting the top marginal rate hasn’t delivered us to economic nirvana before, well they’re sure it will eventually. And even if it doesn’t, it’s still the right thing to do.
There are some cases where partisans will alter their philosophical beliefs in response to real-world evidence; for instance, right now, many Republicans are reexamining what they used to think about criminal justice and the utility of get-tough policies. But taxes occupy a singular place in the conservative philosophical hierarchy, so much so that many elected Republicans literally take an oath swearing never to raise them for any reason. Fourteen of the seventeen Republican presidential candidates have sworn that oath (though Bush is one of the three who hasn’t).
After all that has happened in the last couple of decades, it’s clear that there is literally no conceivable economic event or development that would dent the Republican conviction that cutting taxes for the wealthy is, if not the only thing that can help the economy, the sine qua non of economic revival. Maybe it’s too much to expect them to learn from history.
By: Paul Waldman, Senior Writer, The American Prospect; Contributor, The Plum Line Blog, The Washington Post, September 9, 2015
“Jeb Accuses Trump Of Being A New Yorker”: That’s The Home Of Rich, Snotty Liberals, Ergo, Trump Must Be A Liberal
Jeb Bush complains that the political media have not treated Donald Trump as a serious candidate. They have not dissected Trump’s eclectic stances, which, a new Bush ad contends, show the populist as a fake conservative.
OK. Labor Day is over. Let’s get serious.
Start with that new Bush ad, titled “The Real Donald Trump.”
The ad opens with Trump on TV saying: “I lived in New York City, in Manhattan, all my life, OK? So, you know, my views are a little bit different than if I lived in Iowa.”
Trump is from New York. Who knew? That’s the home of rich, snotty liberals. Ergo, Trump must be a liberal, or so the serious Bush implies.
When it comes time to raise substantial piles of campaign cash, Jeb seems to like New Yorkers just fine. Indeed, he is a frequent flier to the Manhattan till. Last winter, private equity magnate Henry Kravis threw a fundraiser for Jeb at his Park Avenue spread. The price of admission — $100,000 a ticket — raised eyebrows even on Wall Street.
Oh, yes, we’re supposed to talk about Trump’s policy positions.
The Bush ad has Trump saying years ago that the 25 percent tax rate for high-income people should be “raised substantially.” Do note that Ronald Reagan’s tax reforms left the top marginal rate at 28 percent — and after closing numerous loopholes. Also, capital gains were then taxed as ordinary income, meaning the rate for the wealthiest taxpayers was 28 percent. (The top rate is now 23.8 percent.)
Speaking of the tax code, Trump vows to close the loophole on carried interest. It lets hedge fund managers pay taxes on obviously earned income at a lower rate than their chauffeurs pay. “They’re paying nothing, and it’s ridiculous,” Trump says.
A writer at the conservative Weekly Standard recently asked Bush whether he’d end the deal on carried interest. “Ask me on Sept. 9″ was Bush’s noncommittal answer. That’s when he plans to unfurl his tax reform plan.
The ad has a younger Trump coming out for single-payer health care. That sounds a lot like Medicare.
Trump is shown saying he’s pro-choice on abortion. A recent CBS poll had 61 percent of Republicans opposing a ban on abortion, although many want stricter limits.
About Trump’s being a lifelong New Yorker, well, that’s not entirely true. He spends a good deal of quality time in Palm Beach, Florida.
“Donald is a perfect fit for Palm Beach,” Shannon Donnelly, the society editor for the Palm Beach Daily News (aka “The Shiny Sheet”), told me. “He has an office in New York but is rarely there.”
“We’re overdue for Winter White House,” Donnelly added. “We haven’t had one since that guy from Massachusetts [John F. Kennedy] moved in with all his rambunctious siblings.”
Your author cannot sign off without opining that Trump’s crude remarks about Mexicans should disqualify him from becoming president. The Trump ad tying Bush’s rather liberal thoughts on immigration to faces of Mexican criminals who murdered people in this country is rather disgraceful.
But it is not unlike the Willie Horton ad that Bush’s father, George H.W., ran in his 1988 campaign. Horton had raped a woman after being released from a Massachusetts prison on a weekend furlough. The Democratic candidate, Michael Dukakis, was Massachusetts’ governor at the time. The elder Bush’s ads continually flashed Horton’s picture in what many considered a stereotype of a scary black man.
“By the time we’re finished,” Bush campaign manager Lee Atwater said, “they’re going to wonder whether Willie Horton is Dukakis’ running mate.”
Let’s get serious about Trump’s record? Yes, and the same goes for everyone else’s.
By: Froma Harrop, The National Memo, September 8, 2015
“Trump Is Right On Economics”: Jeb Relying On Magic Of Tax Cuts To Double The Growth Rate Is Pure Supply-Side Voodoo
So Jeb Bush is finally going after Donald Trump. Over the past couple of weeks the man who was supposed to be the front-runner has made a series of attacks on the man who is. Strange to say, however, Mr. Bush hasn’t focused on what’s truly vicious and absurd — viciously absurd? — about Mr. Trump’s platform, his implicit racism and his insistence that he would somehow round up 11 million undocumented immigrants and remove them from our soil.
Instead, Mr. Bush has chosen to attack Mr. Trump as a false conservative, a proposition that is supposedly demonstrated by his deviations from current Republican economic orthodoxy: his willingness to raise taxes on the rich, his positive words about universal health care. And that tells you a lot about the dire state of the G.O.P. For the issues the Bush campaign is using to attack its unexpected nemesis are precisely the issues on which Mr. Trump happens to be right, and the Republican establishment has been proved utterly wrong.
To see what I mean, consider what was at stake in the last presidential election, and how things turned out after Mitt Romney lost.
During the campaign, Mr. Romney accused President Obama of favoring redistribution of income from the rich to the poor, and the truth is that Mr. Obama’s re-election did mean a significant move in that direction. Taxes on the top 1 percent went up substantially in 2013, both because some of the Bush tax cuts were allowed to expire and because new taxes associated with Obamacare kicked in. And Obamacare itself, which provides a lot of aid to lower-income families, went into full effect at the beginning of 2014.
Conservatives were very clear about what would happen as a result. Raising taxes on “job creators,” they insisted, would destroy incentives. And they were absolutely certain that the Affordable Care Act would be a “job killer.”
So what actually happened? As of last month, the U.S. unemployment rate, which was 7.8 percent when Mr. Obama took office, had fallen to 5.1 percent. For the record, Mr. Romney promised during the campaign that he would get unemployment down to 6 percent by the end of 2016. Also for the record, the current unemployment rate is lower than it ever got under Ronald Reagan. And the main reason unemployment has fallen so much is job growth in the private sector, which has added more than seven million workers since the end of 2012.
I’m not saying that everything is great in the U.S. economy, because it isn’t. There’s good reason to believe that we’re still a substantial distance from full employment, and while the number of jobs has grown a lot, wages haven’t. But the economy has nonetheless done far better than should have been possible if conservative orthodoxy had any truth to it. And now Mr. Trump is being accused of heresy for not accepting that failed orthodoxy?
So am I saying that Mr. Trump is better and more serious than he’s given credit for being? Not at all — he is exactly the ignorant blowhard he seems to be. It’s when it comes to his rivals that appearances can be deceiving. Some of them may come across as reasonable and thoughtful, but in reality they are anything but.
Mr. Bush, in particular, may pose as a reasonable, thoughtful type — credulous reporters even describe him as a policy wonk — but his actual economic platform, which relies on the magic of tax cuts to deliver a doubling of America’s growth rate, is pure supply-side voodoo.
And here’s what’s interesting: all indications are that Mr. Bush’s attacks on Mr. Trump are falling flat, because the Republican base doesn’t actually share the Republican establishment’s economic delusions.
The thing is, we didn’t really know that until Mr. Trump came along. The influence of big-money donors meant that nobody could make a serious play for the G.O.P. nomination without pledging allegiance to supply-side doctrine, and this allowed the establishment to imagine that ordinary voters shared its antipopulist creed. Indeed, Mr. Bush’s hapless attempt at a takedown suggests that his political team still doesn’t get it, and thinks that pointing out The Donald’s heresies will be enough to doom his campaign.
But Mr. Trump, who is self-financing, didn’t need to genuflect to the big money, and it turns out that the base doesn’t mind his heresies. This is a real revelation, which may have a lasting impact on our politics.
Again, I’m not making a case for Mr. Trump. There are lots of other politicians out there who also refuse to buy into right-wing economic nonsense, but who do so without proposing to scour the countryside in search of immigrants to deport, or to rip up our international economic agreements and start a trade war. The point, however, is that none of these reasonable politicians is seeking the Republican presidential nomination.
By; Paul Krugman, Op-Ed Columnist, The New York Times, September 7, 2015
“How Trump Got In Jeb’s Head”: Endlessly Mocking And Belittling, Unlike The Other Bushes, Jeb Can’t Handle It
When Donald Trump calls Jeb Bush a “low-energy person” whose campaigning lacks spark, a voter might be tempted to think Bush suffers from “Low T,” the mostly made-up malady marketed by the pharmaceutical industry. Whatever Trump’s true intention, the psychological warfare he’s so good at waging had the intended effect, finally provoking a response from Bush, the self-described “joyful tortoise” whose passivity toward his tormentor has been baffling.
“If you’re not totally in agreement with him, you’re an idiot, or stupid, or you don’t have energy or blah blah blah,” Bush said in Spanish at an event in Miami last week. He said Trump attacks him every day with “barbarities,” to which Trump responded with choice tweets.
“It’s the 2016 version of ‘the Wimp Factor,’” says Jack Pitney, a government professor at Claremont McKenna College in California. That’s hitting Jeb where it hurts. When his father announced his presidential candidacy in October 1987 to succeed President Reagan, the cover of Newsweek featured the Vice President piloting his yacht with the words, “Fighting The Wimp Factor.”
It was a searing metaphor for the elder Bush’s passivity and his seeming lack of toughness. A decorated World War Two veteran whose heroism had never been questioned, Bush’s New England patrician sensibilities had long ago obscured his war record, and eight years as a subservient vice president didn’t help.
The elder Bush went on to win the nomination and to run a campaign second to none in its toughness. He set down a marker that his first-born son followed – George W. embraced the psychological warfare it takes to win— and perhaps now his second-born son will, too.
But for now, Trump is the master. He’s taunting and mocking and belittling the other candidates, and if the other candidates ignore him on the theory they don’t want to feed the beast, he gets covered and they sink in the polls. If they engage him, as Bush has tentatively begun to do, it’s the same phenomenon. He gets covered and they sink in the polls.
“Candidates routinely play with each other’s heads, but no one has been as blatant and brazen as Trump,” says Pitney. He recalls Bob Dole barking to Bush in the ’88 race, “Quit lyin’ about my record,” and Bush needling Republican rival Pete Dupont by calling him “Pierre.” Now, it’s an every day occurrence for Trump to call other candidates “morons” or “idiots” or “losers,” and with rare exception they take the broadsides.
The dynamic is reminiscent of a joke President Reagan used to tell about a guy who seeks help from a psychiatrist because his brother thinks he’s a chicken. How long has this been going on, he’s asked. Fifteen years. Why didn’t you seek help sooner? Because we needed the eggs, he replies.
That sums up the dilemma Republicans face. They need the eggs; they don’t want to offend Trump’s supporters.
Trump has shone a harsh light on the rest of the Republican field, exposing the vapidity and mediocrity of the candidates, who have been touted as this sterling field of current and former governors and senators. None has shown good political chops; they don’t know how to make themselves and their ideas stand out, to the extent they have any beyond the usual sound bites.
“One of the problems is they’re all scared to death he’ll take his marbles and go home,” says Bill Galston, a senior fellow at the Brookings Institution and former domestic policy advisor in the Clinton White House. “An independent Trump candidacy would destroy the Republican Party’s prospects, and they know it. They have no idea where his limits are—if any exist.”
Trump is very good at negotiating tactics and he’s using the leverage of a potential third party bid to suppress the full-throated response that many of the candidates would like to voice but don’t dare for fear of what Trump might do. He’s now signed the RNC’s “loyalty pledge”, but not everyone is convinced that a non-binding agreement will ensure Trump doesn’t play the spoiler.
As for what motivates Trump, I turned to Dr. Jerrold Post, Founding Director of the Political Psychology Program at George Washington University and author of Narcissism and Politics: Dreams of Glory, which was published last year. Post said he was sorry he didn’t have a chapter on Trump, and in keeping with the ethics of his profession, he spoke about narcissists in general, rather than singling out Trump.
Narcissists react to any kind of rivalry and have a very difficult time in sharing the limelight. They are “exquisitely sensitive to slights.” Anyone who vaguely stands up to Trump gets this massive pushback.
“The aspect that is interesting is the ease and sense of mastery—the consummate narcissist believes in his capacity to run the world basically, and conveys such a sense of confidence with such absolutely absurd positions,” says Post. For example, Trump on immigration, what he conveys is, “I am supreme; I am able to do anything, and if I say the Mexican government will pay for this, it will be done.”
Trump’s success in the polls for now has a lot to do with his followers and “the empowerment he provides,” says Post. “He offers something to the person who feels inadequate in himself.” Voters powerless to change a government that is failing them are an easy sell for Trump’s sense of mastery and strength and power.
“You stick with me and I’ll get rid of these people who are using the system,” is the message that Trump conveys. Call it populist, or narcissistic, when it comes to mind games, Trump has not yet met his match.
By: Eleanor Clift, The Daily Beast, September 7, 2015
“Get The Facts Jeb”: Why Jeb Bush Should Pledge To Roll Out The Welcome Mat For Asian Birth Tourists
Jeb Bush used to be the Mr. Rogers of GOP presidential candidates — a gentle fellow who would put you to sleep a few minutes after coming on TV. Now Bush is the GOP’s Bambi — a frozen deer who doesn’t know which way to turn as the headline-beaming monster truck that is Donald Trump bears down upon him.
Nowhere is this clearer than in Bush’s recent cringe-inducing suggestion that the real abusers of America’s birthright citizenship are Asian birth tourists — not Latino “anchor babies,” as Trump claims.
But as the GOP’s token pro-immigration candidate, if Bush had half of Trump’s cojones, he wouldn’t throw Asians under the bus to save Latinos. He’d tell Trump that “anchor babies” are a problem more hyped up than Trump’s bouffant — and birth tourism is a blessing that America should wholeheartedly welcome.
“Anchor babies” are a myth invented by restrictionists to try and scrap America’s constitutionally guaranteed right to birthright citizenship. The term used to refer to pregnant Latino women who supposedly deliberately and illegally came to America to give birth to American children who would become mom and dad’s green card sponsors. But this scheme can involve wait times of up to 31 years (kids can’t sponsor before age 21, and parents sometimes have to wait 10 years outside America before qualifying). Hence, restrictionists couldn’t find many examples to whip up anti-immigrant hysteria. So now they have dubbed every one of the 300,000 children born to undocumented parents annually as anchor babies whose real purpose is to prevent their unauthorized parents from being deported.
This argument is ridiculous. Vanishingly few undocumented immigrants have children specifically to escape deportation. They have children because they want to — for any number of non-cynical reasons. And yes, this can sometimes help them escape deportation. But don’t conflate that consequence of birth with the motives for pregnancy.
Anchor babies don’t exist in any meaningful sense. Birth tourism, however, does. And that’s a good thing.
No super-reliable figures are available, but the number commonly bandied about puts birth tourist babies at a mere 35,000 annually. Unlike the poor, unauthorized Latino parents of mythical “anchor babies,” birth tourism involves relatively well-off couples, the vast majority from China, who come to America when it comes time to give birth so their kid will score U.S. citizenship.
Another benefit for these Chinese couples: Beijing’s autocrats don’t count children born with other nationalities against a couple’s one-child quota. No doubt, a U.S. passport for their newborn is a huge attraction. But America is not the only destination for couples trying to dodge China’s draconian birth control policies. Mainland Chinese couples also flock to Hong Kong (all of which the pro-life, pro-family conservative editors of National Review Online should understand and applaud rather than running confused pieces like this conflating “anchor babies” and birth tourists to promote their anti-birthright citizenship crusade).
Immigration restrictionists love to deride “anchor baby” parents for being in the United States illegally. But that’s not true with birth tourists. They come here legally. Even a recent Rolling Stone “expose” of Los Angeles-based maternity agencies acknowledged: “Birth tourists, arriving on legal visas, aren’t breaking any laws while in the country.” Meanwhile, a May Bloomberg Businessweek story about these agencies — that for a fee of up to $50,000 help a couple obtain U.S. visas, put them up in hotels during their long stay in America, arrange doctors and hospitals and then passports for their infant — found that most of them go out of their way to coach their clients in “cheng shi qian” (honest visa applications). This is not to say that no one lies, but it is far from standard practice — which is why a Department of Homeland Security raid on maternity hotels earlier this year didn’t seem to come up with many instances of visa fraud, despite a long undercover investigation.
Restrictionists constantly accuse “anchor baby” parents of mooching off American taxpayers by using emergency services for child delivery and collecting welfare through their American child. (Never mind that unauthorized parent-headed households receive far less welfare than native ones of similar income, and are far less prone to welfare dependency.) But none of that applies to birth tourists, who, with few exceptions, pay for the entire cost of delivery out of pocket. In fact, the agency that formed the cornerstone of the Bloomberg story went out of its way to ensure that its clients don’t use public money, and keep copious documentation to prove that.
More to the point, birth tourist babies go home to be raised during their most expensive phase — only to possibly return to America after their 18th birthday, during their most productive phase. In effect, birth tourism allows America to outsource the raising of its citizens, resulting in enormous savings, given that it costs a whopping $300,000 to raise a child in a middle-income family in America today.
Every adult immigrant, even poor Latinos, constitute a windfall for America, given that America reaps the dividends of another society’s investment in them. (Indeed, immigration is arguably a far cheaper way than having children for a society to maintain its population level.) But birth tourist babies are a special boon because they are the product of super-ambitious parents who are obviously sparing no expense or effort to build their child’s full potential and give him/her options.
This is why it is all the more unfortunate that Jeb Bush put birth tourists in the crosshairs of his party’s ugly war on immigration. He has said in the past that Latinos who come to America illegally to give their children a better life are engaging in an “act of love.” This is equally true for Asian birth tourists.
Bush should have used their example to defend and strengthen America’s birthright citizenship against Trump’s attacks. Instead, in his panic about his nose-diving poll numbers, he may have done the opposite — none of which inspires much confidence in another Bush presidency.
By: Shika Dalmia, The Week, August 28, 2015
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