Tax day is a good time to wonder just what sort of changes to the tax code we might expect when we get a new president 21 months from now. Most of them haven't produced lengthy position papers yet, but we can get at least a preliminary idea of where they'd like to take the tax code. So let's take a look at what we know so far about the candidates and their ideas on this topic:
Jeb Bush: Bush hasn't released a tax plan, but he has refused to sign Grover Norquist's pledge to never ever, ever raise taxes, as most congressional Republicans-including Rand Paul, Ted Cruz, and Marco Rubio-have. In a 2012 congressional hearing, Bush was asked about a question Republican candidates got at a presidential primary debate, where they were asked whether they would accept a deal that included one dollar of tax increases for every ten dollars of spending cuts. Everyone had said they'd walk away from such a deal, so horrifying would even a tiny increase in taxes be. Bush replied, "If you could bring to me a majority of people to say that we're going to have $10 of spending cuts for $1 of revenue enhancement-put me in, Coach." Remarkably, this is taken by many Republicans as evidence that Bush is some kind of fiscal apostate.
Will Bush deal with these questions by coming out with a tax plan full of upper-end cuts? I wouldn't be surprised.
Marco Rubio: Rubio has the most specific plan of any of the candidates so far. His plan contains some provisions that would benefit people of modest incomes, but it also has huge giveaways to the wealthy. He would reduce the current seven income tax brackets down to two: 15 percent for individuals earning under $75,000 a year, and 35 percent for everyone over that. It would mean a tax increase for some people in the middle-for instance, if you earn $100,000 a year, you're currently paying a marginal rate of 25 percent, so your taxes would go up-but it also means a cut for those now paying the top rate of 39.6 percent.
But the real favor to the wealthy is the fact that Rubio would completely eliminate all taxes on capital gains, stock dividends, and inheritances. That's right, eliminate them. To zero. So congrats, Paris Hilton, you'll never have to pay a dime in taxes.
Rand Paul: Paul hasn't been all that specific about taxes, though he has said he wants to cut them by "hundreds of billions of dollars." He rejects the idea that cuts ought to be "deficit neutral"-that is, neither raise nor lower the deficit-meaning that his cuts would increase the deficit. He might argue that his dramatic spending cuts would offset the decreased revenue, but he also believes in the Tax Fairy, i.e. the idea that cutting taxes increases revenue. The section of Paul's website on taxes is 159 vague words about a "plan" that as of yet doesn't exist. "My tax plan will get the IRS out of your life, and out of the way of every job creator in America," it reads. "My plan will also cut spending and balance the budget in just five years. It will be the largest tax cut in American history and a tax cut that will leave more money in the paychecks of every worker in America." Paul has also advocated a flat tax.
Scott Walker: Walker doesn't have a campaign yet, nor does he have a tax plan. But his record in Wisconsin is such that it's been touted by none other than Grover Norquist himself. Walker has slashed taxes so much that because of the decreased revenue he was forced to miss a payment on the state's debt. He has toyed with the idea of eliminating the state's income tax, and said that eliminating the federal income tax "sounds pretty tempting" and that he'd like to reduce income tax rates.
Ted Cruz: Though Cruz hasn't released a formal plan either, he proposes eliminating the IRS and instituting "a simple flat tax that allows every American to fill out his or her taxes on a postcard." Without an IRS to read and process those postcards, the task would presumably be taken up by a cadre of tiny magical creatures, each with gossamer wings and the face of Ayn Rand.
Hillary Clinton: As yet, we've heard nothing from her on this subject.
Presumably, all or most of these candidates (and whoever else ultimately decides to get in the race) will produce more details in the coming days. But at the moment we can say with a fair degree of confidence that the eventual Republican nominee is going to be advocating a reduction in income tax rates, likely along with some kind of reduction in investment taxes (not to mention corporate taxes, which all Republicans want to reduce or eliminate, but which I haven't discussed here). They will surely say that therein lies the key to spectacular economic growth and a rising tide for all. Democrats will respond that Republicans just want giveaways for the wealthy. In other words, it'll be like most presidential elections.
