In an article for The New York Times, CNBC Chief Washington Correspondent John Harwood criticized the field of Republican presidential candidates for unveiling so-called “populist” tax reform plans that overwhelmingly benefit the wealthy. Harwood will moderate the upcoming Republican presidential debate on October 28, which will focus on the economy.
Harwood Challenges The GOP's Assertions Of Populism While Promoting Tax Cuts For The Wealthy
NY Times: Despite “Populist Talk,” All Republican Tax Plans Benefit The Rich. In an October 14 article for The New York Times, CNBC's John Harwood argued that the so-called “populist” tax reform proposals endorsed by most of the Republican presidential candidates are actually giveaways for top income earners. Harwood used estimates from the conservative-leaning Tax Foundation to show that tax plans put out by Jeb Bush, Mike Huckabee, Rand Paul, Marco Rubio, and Donald Trump primarily benefit the wealthy and reflect “a party still wedded to the theories of supply-side economics 35 years after President Reagan championed them under far different circumstances”:
Mr. Rubio, in New York for fund-raising at the time of the interview, offers an example. He proposes a significant new tax credit for households with children. But he would also cut the top federal income tax rate to 35 percent, from nearly 40 percent, and eliminate levies on capital gains, dividends and multimillion-dollar estates.
All told, the conservative Tax Foundation estimates that Mr. Rubio's plan would cut taxes an average of 17.8 percent for all taxpayers -- but 27.9 percent for the top 1 percent of earners.
Mr. Rubio's rivals would also deliver disproportionate gains to the most affluent. Former Gov. Jeb Bush of Florida would adjust tax brackets so that the number of families that owe no income tax would rise to 81 million, from 66 million. But he would cut the top income tax rate of 39.6 percent more than twice as much as his brother did as president, to 28 percent, while reducing the top capital gains rate to 20 percent and eliminating the estate tax.
The foundation says the proposal from the real estate magnate Donald J. Trump, who leads Republican polls, would raise incomes of the top 1 percent of earners 27 percent -- also the most of any group.
Blunt talk aside, Mr. Huckabee also favors a tax plan that analysts say also disproportionately benefits the affluent. The so-called fair tax, a national 23 percent sales levy, would tax consumption instead of income -- shielding savings that the wealthy can afford to set aside but that the working class cannot.
Rand Paul, a Kentucky senator whose proposed 14.5 percent flat tax the Tax Foundation says would most benefit incomes above $1 million, reacted to Mr. Bernanke's regret by turning the tables. “He should also admit that he was part of the problem and that his policies led to a great deal of this, too,” said Mr. Paul, a persistent critic of Fed policy. [The New York Times, 10/14/15]
Several Media Outlets, Including The Times, Have Previously Promoted Bush's Tax Reform Plan As “Populist”
Politico: Bush Tax Plan “Hits Wall Street.” In a September 8 article titled “Jeb Bush tax plan hits Wall Street,” Politico described the Republican presidential candidate's proposal to close the so-called “carried interest loophole,” which allows some high earners to pay the lower capital gains tax rate on large chunks of income, as a “populist move”:
His plan would also cut rates on capital gains and dividends to 20 percent with one notable exception: carried interest. His plan targets the tax provision that allows some private equity and hedge fund managers to characterize earnings as capital gains, allowing them to pay much lower rates than if it was considered ordinary income.
That's a populist move that comes after rival Republican presidential candidate Donald Trump also complained about the provision, saying the tax code allows hedge fund managers to “get away with murder.” [Politico, 9/8/15]
The Hill: Bush Is Trying To Tap “Populist Sentiments” With Tax Plan. A September 8 article in The Hill claimed that Bush's tax reform plan is an attempt to appeal to populists by ending a tax break for hedge fund managers:
Republican presidential candidate Jeb Bush proposes scrapping a tax break prized by Wall Street as part of a new plan that would sharply lower tax rates for both individuals and businesses.
Bush's plan received quick praise Tuesday from the GOP's business wing, which has long lobbied to cut the corporate tax rate.
But in proposing to roll back the so-called carried interest incentive, Bush is also seeking to tap into the populist sentiments that have helped propel businessman Donald Trump to the top of the GOP polls. [The Hill, 9/8/15]
Wall Street Journal: Bush's Tax Plan “Takes Aim” At The Wealthy. In a September 9 article, The Wall Street Journal framed Bush's tax reform plan as one that goes after tax breaks for corporations, special interests, and the wealthy, and highlighted the candidate's claim that his policies would “spur economic growth” and benefit low and middle-income workers:
But in a nod to the populist anger roiling both parties, Mr. Bush, a former banker, went a step further than most Republicans by taking aim at a range of tax breaks that benefit specific industries and companies, as well as wealthy individuals who have figured out how to shield chunks of their income from the Internal Revenue Service.
In a speech here outlining the proposal, Mr. Bush predicted his proposal would spur economic growth and shift more of the tax burden away from lower- and middle-income Americans to their richer neighbors. It is an argument designed in part to insulate Mr. Bush from the sort of attacks that dogged 2012 GOP nominee Mitt Romney,who was accused of favoring the wealthy over the working class. [The Wall Street Journal, 9/9/15]
New York Times Called Bush's Plan “Populist” After Politico, WSJ, and The Hill Fell For Same Claims. In a September 9 article, The New York Times called Bush's tax reform proposal “a populist plan,” and claimed it challenges conservative policy on taxes and the economy:
Former Gov. Jeb Bush is challenging some long-held tenets of conservative tax policy with a populist plan that targets valuable deductions that benefit the wealthy and the “carried interest” loophole that has enriched hedge fund managers for years.
The plan is intended to spur the economy to grow at an annual rate of 4 percent by giving companies incentives to invest domestically and by easing the tax burdens on low and middle-income families. [The New York Times, 9/9/15]