Economic factors are always paramount in presidential elections. But in a year when the unemployment rates remains above 9% and the Eurozone debt crisis looms, the importance expands exponentially. With the first Republican primary less than two months away, each of the potential candidates has outlined a tax and jobs plan that will, according to them, bring the United States out of this recession and restore it to its once great position as the only viable superpower.
Mitt Romney, the unflappably stagnant former governor of Massachusetts, introduced his 49 point jobs plan last month in Las Vegas. It entails cutting corporate tax rates from 35% to 25%, eliminating the estate tax, and extending the so-called Bush Tax Cuts. He also recommends reducing the regulatory burdens on business by repealing Obamacare and Dodd-Frank (the financial reform bill) and expanding drilling in areas such as the Gulf Coast, the Plain States and Alaska.
Texas Governor Rick Perry, the unflappably flappable candidate, introduced his tax and jobs proposals in recent weeks. His jobs plan focuses mainly on increased energy production in oil and natural gas which he states will “unleash 1.2 million American jobs through safe and aggressive energy exploration at home.” His tax plan proposes creating an opt-in flat tax, meaning those who choose to do so, can have their taxes reduced to a flat rate.
Former Godfather Pizza Executive Herman Cain, the ever-present attention seeker, has infamously proposed his 9-9-9 plan to reform the tax code. It would throw out the existing tax code and replace it with a 9% corporate tax rate, 9% individual income tax, and 9% national sales tax. Cain has not explained his plan much beyond that except to say that his advisors have crunched the numbers and it will be deficit neutral.
Former Utah Governor and Ambassador to China Jon Huntsman (disclaimer, I volunteer on Huntsman’s campaign) has proposed a tax and jobs plan that synthesizes many aspects of Romney, Perry and Cain’s proposals. He calls for tax reform in which loopholes and deductions for corporations and the rich are eliminated and the base is broadened. The corporate tax rate would then be reduced from 35% to 25% and the personal income tax would be reduced to flatter, fairer rates of 8%, 14%, and 23%. He has also called for expanded oil and natural gas exploration, regulatory reform, free trade expansion, and stronger relationships with foreign nations.
Other candidates have made various similar and sometimes outlandish proposals. Rick Santorum, has proposed cutting the tax rate for manufacturing to 0%, an interesting thought. Ron Paul has proposed eliminating the Departments of Education, Commerce, Energy, Interior, and Housing and Urban Development. Michelle Bachmann has not been able to formulate a sentence that does not end with “repeal Obamacare.”
Many of these proposals are seriously flawed. Romney’s tax plan leaves the existing tax code, loopholes, deductions, and all, in place allowing for companies like GE to continue to make billions of dollars and pay no income taxes. Perry’s tax plan also leaves the existing loopholes and deductions in place because those benefiting from them will not choose to opt-in to the proposed flat tax. Cain’s plan is simply simplistic; as a tax lobbyist I spoke to recently put it, “I have serious questions about a tax policy that can be summed up in a catch phrase.”
Santorum’s proposal concerning tax rates on manufacturing is intriguing but has little chance of success in Congress. Paul’s proposals are simply ludicrous; maybe in a perfect world we could do away with five Executive Agencies and be fine, but that is not this world. Huntsman’s jobs and tax plan was called “big and bold” by Reuters and “as impressive as any to date in the GOP presidential field, and certainly better than what we’ve seen from the front-runners.” Because of my stake in the Huntsman campaign I will let you decide for yourself.
What is clear is that the Republican candidates for president have displayed many similarities and many differences in these proposals. The distinctions may seem minute, but they are clear and integral in this time of economic woe. The candidates now have approximately eight weeks to distinguish themselves from each other and from President Obama. It should be interesting to watch.
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