It’s probably not worth investing too much time in scrutinizing Republican presidential candidate Jon Huntsman’s new tax plan, since Huntsman is currently polling at 1% in GOP polls.
But given that the former Utah governor is ostensibly the “moderate” in the Republican field, and the only GOP candidate willing to say anything with even a semblance of intelligence, it is worth appreciating how ridiculous his plan really is — not because he’s going to win, but because it helps us understand what passes for Republican “moderation” in 2011.
Mr. Huntsman’s plan, which borrows from both Representative Paul D. Ryan’s proposal and the bipartisan Simpson-Bowles Commission recommendations to reduce the deficit, also calls for sharply lowering both corporate and individual tax rates, as well as ending taxes on capital gains and dividends, positions more in line with Republican orthodoxy.
It calls for simplified income tax rates of 8 percent, 14 percent and 23 percent, but would eliminate popular tax breaks like the deduction for interest on home mortgages.
So, Huntsman’s big idea is … more tax cuts.
Unlike some Republicans, he intends to pay for them by eliminating all loopholes, deductions, and tax expenditures from the tax code. While these tax measures have been the subject of considerable debate lately — Democrats see them as a way of boosting revenue without raising tax rates — Huntsman sees them as a way, not to reduce the deficit, but as a way to finance more tax cuts, including massive breaks for the wealthy.
The result is “reform” that’s fundamentally regressive. The earned income tax credit, the home mortgage deduction, the child tax credit, etc., would all disappear. And while the merits of these tax breaks are certainly open to debate, it’s a problem when the saving from each would be redirected into a capital gains tax break that tends to benefit those at the top and a lowering of the corporate tax rate.
As Seth Hanlon explained, Huntsman’s plan “is as bad for the middle-class — and as nutty — as any proposed by his rivals. It would pay for a half-million-dollar tax break for the richest 0.1 percent of Americans with tax increases on the middle-class and new taxes on seniors, veterans, and poor families.”
Remember, for those who take reality seriously, Huntsman is almost universally seen as the least ridiculous Republican presidential candidate. He’s the one who’s to the left of the multi-candidate field, and yet, Huntsman nevertheless envisions yet another round of massive tax breaks as a way to get the economy moving — in effect, embracing a Bush-on-steroids kind of plan.
Indeed, Huntsman would keep all of Bush’s income-tax breaks, and simply make them much more costly, despite the fact that Bush’s policy failed miserably, eliminating any chance of using revenue to close the budget gap anytime in the next couple of decades.
This isn’t a plan; this is a joke. That it’s coming from a “moderate” reminds us of just how far to the right the GOP really is.